Reserves: service deficit was $900 million during July

The Services account of the Central Bank of Argentina (BCRA) recorded a deficit of $900 million in July, which implies a decrease of 3% year-on-year. Thus, in the accumulated total for the first seven months of the year, the services sector registers a deficit of $5.1 billion; this represents an improvement of 22% compared to the same period last year. If the trend continues for the rest of the year, the deficit for 2026 will be around last year's figures, which was the second highest in the statistical series, but without exceeding it, for now.

According to the BCRA, the improvement ---in the month of the 2026 World Cup--- is linked to a 24% year-on-year increase in service export receipts, while service import payments increased by around 11% year-on-year.

Another official estimate that plays into the balance of the exchange accounts is the Travel and Tickets account through the exchange market, which showed net outflows of $710 million, explained by gross outflows of about $1.048 billion and gross receipts of $338 million. In this regard, the official information explains that gross outflows arise from card expenses for travel, estimated at $809 million (a figure that excludes digital services of $206 million and card payments for postal services for the dispatch of goods of about $108 million).

In addition, $109 million was recorded in remittances abroad from tourism operators and $130 million associated with passenger transport services. Similarly, gross receipts were estimated, explained by card receipts for travel of $260 million (excluding digital services and about $5 million in receipts from exports of goods dispatched through postal services), remittances from tourism operators abroad, and non-resident tickets of $35 million and receipts from passenger transport services of $43 million.

"It should be noted that 70% of all outflows for consumption of goods and services for travel, other card payments, and passenger transport services are directly settled by customers with funds in foreign currency, mostly purchased in the exchange market as cash without specific purposes," estimates the BCRA.

The rest of the Services account was explained by net outflows for Other services ($387 million), Freight and insurance ($169 million), and postal services for the dispatch of goods ($103 million), which were partially offset by net receipts for Business, professional, and technical services of $469 million.

On the other hand, operations in terms of primary income represented a net outflow of $2.772 billion in the month, explained by net outflows of interest (of $2.309 billion, of which $1.883 billion were made by the Government and the BCRA) and profits, dividends, and other rents (of $463 million).

It is worth noting that outflows for profits and dividends in July were $451 million, mainly made through purchases in the exchange market. Of the total gross outflows for this concept, the sectors of Energy ($149 million), Financial Entities ($119 million), and Chemical, Rubber, and Plastic Industry ($91 million) stand out. Finally, operations for secondary income represented a surplus of $8 million.

It is important to remember that, through Communication A-8226 of April 2025, the BCRA authorized access to the foreign exchange market to make dividend payments to non-resident shareholders corresponding to the profits obtained in the balances whose fiscal years begin on January 1, 2025; in turn, legal and natural persons who subscribed to BOPREAL from series 3 onwards can use the dollars they access through the collection of that bond for payments in the concept of profits and dividends.

On the other hand, regarding estimates on dollar purchases for expenses abroad and tourism, for a year now, the BCRA distinguishes between consumption for trips abroad and non-presential purchases of goods from foreign suppliers and, on the other hand, the consumption of digital services from foreign suppliers. Therefore, the consumption of digital services is grouped under the account Other services. Thus, the transfers made abroad to settle balances with card-issuing companies include both the consumption made for trips abroad and the non-presential purchases of goods and services from foreign suppliers. In the same line, the account Travel and Tickets excludes the estimation of payments and collections for purchases of goods dispatched through postal services.

The balance for the year so far shows that the deficit for Consumption of goods and services paid with cards and travel, which amounts to u$s4.186 billion, and the corresponding Charges for the use of intellectual property, for u$s625 million, and Freight, for u$s663 million, along with Passenger transport services, of u$s518 million, explain the performance of the Services account. On the other side, only Business, professional, and technical services play in favor, with a surplus of u$s2.578 billion, and, to a lesser extent, Trade-related services, for u$s308 million, and Information and IT services, for u$s113 million.

Other items that accumulate deficits this year are Others, with u$s1.296 billion; Government Services, with u$s239 million; Insurance Services and Financial Services, with more than u$s155 million on average each; and Operating Lease Services, with more than u$s240 million.

Finally, the net payment of Profits and Dividends and Interest accumulates a deficit so far in 2026 of u$s3.241 billion and u$s2.464 billion, respectively.

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