The Government exposed Strada's maneuver to hide the K debt and Milei's debt reduction

The Government exposed how Kirchnerism attempts to install a false narrative about public debt to hide the inherited deterioration in the Central Bank's balance sheet. The official response came after the ultrakirchnerist deputy from Unión por la Patria Julia Strada disseminated a CEPA graph to accuse the Minister of Economy, Luis Caputo, of having increased debt during the management of Javier Milei.

The controversy began when Caputo published a graph from the Ministry of Economy with official data followed by the phrase “all the debt is Kirchnerist.” The chart compared the variation of consolidated public debt between the Treasury and the BCRA. According to the official measurement, since 2023, consolidated debt has decreased, while during the Kirchnerist and Frente de Todos administrations, significant increases were recorded.

Strada responded with an alternative measurement that excluded the Non-Transferable Bills from the BCRA, a methodological decision that was harshly criticized by the Official Response Office. The agency argued that this way of measuring leaves out relevant liabilities of the consolidated public sector and allows presenting as new debt operations that, in reality, served to cancel liabilities of the Central Bank.

The official explanation particularly targeted the remunerated liabilities of the BCRA, which during the inherited situation generated an explosive dynamic of monetary emission. According to the Government's response, public debt cannot be analyzed without considering those liabilities, as many Treasury placements were used precisely to cancel high-rate obligations that pressured emission, inflation, and exchange rate expectations.

The chancellor Pablo Quirno also intervened and questioned Strada for excluding the Non-Transferable Bills from her calculation. The official stated that those instruments were used during Kirchnerism to finance public spending and deteriorate the Central Bank's balance sheet, while the current administration recognizes them as debt and is moving forward with their cancellation.

In the same vein, the Official Response Office recalled that during Kirchnerism, BCRA reserves were used in exchange for Non-Transferable Bills, which allowed showing a decrease in debt with private entities and international organizations, but at the cost of leaving the Central Bank with fewer liquid dollar assets. The result of that policy was a weakened monetary authority and negative net reserves at the end of 2023.

The Government also emphasized another key point: the nationalization of the AFJP allowed removing debt from the private radar and recording it as intra-public sector debt through ANSES. That is, a accounting maneuver that did not eliminate real obligations but changed their classification.

While Kirchnerism attempts to separate the Treasury from the Central Bank to disguise the inherited numbers, Milei's administration maintains that debt should be measured in a consolidated manner, including the BCRA's liabilities and discounting the Treasury's deposits. From that comprehensive perspective, the Government is cleaning up the Central Bank's balance sheet, rebuilding reserves, and reducing consolidated public debt.