#1Financial Program January 7, 2019 Ministerio de Hacienda Presidencia de la Nación#2Executive Summary The financial program for 2019 continues to show that there is no need to raise financing in the international capital markets The higher than anticipated cash balance at the beginning of 2019 resulting from higher roll-over rates than those included in the original program, have reduced the roll over rate requirement from 60% to 46% in 2019 If the roll over rate of short-term instruments in 2019 were to reach 70% or more, the cash balance at the beginning of 2020 would eliminate any net financing requirements for the year The treasury will have a net long dollar position in 2019. The mechanism for converting the dollars needed to cover peso-denominated expenditures will be announced during 1Q19. PPP projects are not expected to raise financing from the capital markets in 2019. Flexibility to the original framework will reduce the financing to the minimum in order to carry out the works committed for the upcoming months; small alternative financing from multilaterals and banks might be considered. 2#31. Financial program 2. Fiscal policy 3. Macroeconomic outlook#4Financial Program 2019 USD Bn 2019 2019 Needs (excl. Letes) 28.5 Sources (excl. Letes) 39.7 Primary déficit 0.0 Initial cash balance 10.9 Plan Gas 2017 0.6 Interest (private, IFIs, financial public sector) 14.2 IMF 22.5 Principal payments (private) 10.1 Private financing 1.7 International Bonds 2.8 International markets 0.0 Global '19 2.8 Domestic Bonds Bonar '24 3.8 Domestic market 0.0 1.1 ARGDUO '19 1.5 ARGCER '19 0.8 ARGBON '19 Badlar+250 0.1 Other 0.2 Repo 3.5 Repo 1.7 IFIs Principal Payments 3.6 IFIs (ex-IMF) 4.6 IADB + World Bank + CAF 1.7 IADB + World Bank + CAF 4.4 Other 0.2 Other 0.2 Paris Club 1.7 Club de Paris 0.0 Letes (private) Letes in USD Letes in ARS Nota: Totals may not add up due to rounding of intermediate figures. 19.1 Letes (private) 9.7 Letes in USD 9.4 Letes in ARS 8.8 4.5 4.3 4#5Financial Program 2019 by currency USD Bn ARS USD Total ARS USD Total Needs (excl. Letes) 7.5 21.0 28.5 Sources (excl. Letes) 4.5 35.2 39.7 Primary deficit 0.0 Initial cash balance 4.5 6.4 10.9 Plan Gas 2017 0.6 0.6 Interest (priv, IFIs, financial public sec) 4.3 9.9 14.2 IMF Principal payments (private) 2.6 7.5 10.1 Private financing International Bonds 2.8 2.8 International market 22.5 22.5 1.7 1.7 0.0 Global '19 2.8 2.8 Domestic Bonds Bonar '24 2.6 1.2 3.8 Domestic market 0.0 1.1 1.1 ARGDUO '19 1.5 1.5 ARGCER '19 0.8 0.8 ARGBON '19 Badlar+250 0.1 0.1 Others 0.2 0.2 Repo 3.5 3.5 Repo 1.7 1.7 IFIs Principal Payments IADB + World Bank + CAF Other Paris Club 3.6 3.6 IFIs (ex-IMF) 4.6 4.6 1.7 1.7 IADB + World Bank + CAF 4.4 4.4 0.2 0.2 Other 0.2 0.2 1.7 1.7 Club de Paris 0.0 Letes (private) Letes in USD Letes in ARS 9.4 9.7 19.1 Letes (private) 9.7 9.7 Letes in USD 9.4 9.4 Letes in ARS Note: Totals may not add up due to rounding of intermediate figures. A portion of primary spending is carried out in USD. 4.3 4.5 8.8 4.5 4.5 4.3 4.3 5#6Financial Program 2020 USD Bn 2020 2020 Needs (excl. Letes) 25.9 Sources (excl. Letes) 25.9 Primary deficit -5.2 Initial cash balance 0.9 Plan Gas 2017 0.6 Interest (private, IFIs, financial public sector) 15.4 IMF 5.9 Principal payments (private) 12.0 Private financing 16.1 International Bonds 0.4 International markets 0.0 CHF Bond '20 0.4 Domestic Bonds Bonar '24 Bonar '20 Bopomo '20 10.5 Domestic market 1.1 2.5 Refinancing New financing 15.2 10.5 4.7 1.9 ARGDUO '20 1.6 Bogato '20 0.9 Bonte 2020 (banks only) 1.9 Others 0.4 Repo 1.2 Repo 3.0 IFIs (ex-IMF) 0.9 3.0 IFIs Principal Payments Letes (private) Letes in USD Letes in ARS Nota: Totals may not add up due to rounding of intermediate figures. 9.4 Letes (private) 9.4 4.5 Letes in USD 4.5 5.0 Letes in ARS 5.0 16#7Principal payments by bondholder type USD bn 2019 Public Sector Private Sector Total Bonds in foreign currency 2.0 4.0 6.0 BIRAD/USD/6.25%/04-22-2019 (Global '19) 0.0 2.8 2.8 BONAR/USD/8.75%/2024 0.1 1.1 1.2 BONAR/USD/9%/2019/03-15-2019 1.9 0.0 1.9 Bonds in ARS 4.9 2.6 7.5 BONAR DUAL/DLK/4.5%/06-21-2019 (ARGDUO) 0.5 1.5 2.0 BONAR/ARS/1.7056%/CER+3.75%/2-19 (ARGCER) 1.3 0.8 2.1 BONAR/ARS/BADLAR+250bps/03-11-19 (ARGBON) 0.8 0.1 0.9 BONCER/ARS/4.25%+CER/04-15-2019 0.8 0.0 0.8 BONCER/ARS/4.25%+CER/01-15-2019 1.1 0.0 1.1 BONAR/ARS/BADLAR+300bps/06-10-19 0.4 0.0 0.4 OTHER 0.0 0.2 0.2 2020 Bonds in foreign currency BIRAF/CHF/3.375%/12-10-2020 BONAR/USD/8.75%/2024 BONAR/USD/8%/08-10-2020 BONAR 2020/USD/29-05-2020 Bonds in ARS 2.7 4.0 6.7 0.0 0.4 0.4 0.1 1.1 1.2 0.5 2.5 3.0 2.1 0.0 2.1 4.5 6.8 11.3 BOTAPO/BOPOMO 21-06-2020 0.4 1.9 2.4 BONAR DUAL 2020/ARGDUO/4.5% 0.0 1.6 1.6 BOGATO/CER+4%/06-03-2020 0.0 0.9 0.9 BONTE 2020/26%/21-11-2020 (Bank Reserve Requirements) 0.8 1.9 2.7 BONCER/2.25%/28-04-2020 2.2 0.1 2.3 BONAR/BADLAR+325/01-03-2020 0.3 0.1 0.4 BONAR/BADLAR+300/23-12-2020 0.8 0.0 0.8 OTHER 0.0 0.2 0.2 Note: FX rate: ARS/USD 40.1 for 2019 and 44.3 for 2020. Totals may not add up due to rounding of intermediate figures.#8Evolution of the USD Letes Program Letes stock in USD held by private investors (USD bn) $17.1 Domestic investors Foreign investors $15.4 $15.2 $15.1 $14.8 $13.8 $13.0 $11.8 $9.2 $8.6 $8.8 $9.3 $9.5 $9.4 $9.3 $9.4 $8.6 $8.6 $8.5 $8.1 $11.2 $10.7 $10.1 $9.7 $7.9 $6.8 $6.4 $5.8 $5.3 $4.4 $3.7 $2.4 $2.6 $2.1 $1.7 $1.6 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 The stock of Letes held by private investors fell by USD7.4 bn in 2018. The stock of Letes held by domestic investors remained stable. Foreign investors held almost half of the stock outstanding in Jan-18, while they held 16.5% of the Letes outstanding in Dec-18. 8#9Converting USD debt to pesos Letes and Lecaps held by private investors (USD bn) $17.1 $15.4 $15.2 $15.1 $14.8 Letes USD Lecaps ARS $13.8 $13.0 $11.8 $11.2 $10.7 ARS386 $10.1 $9.7 ARS367 ARS350 ARS202 ARS81 ARS85 ARS59 ARS81 ARS81 ARS115 ARS37 ARS37 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 9#10Conservative maturity profile USD Letes maturities held by private investors (USD mm) $819 $926 $459 $418 $691 $601 $1,008 $851 $1,006 $731 $760 $717 $455 11-Jan-19 25-Jan-19 8-Feb-19 22-Feb-19 15-Mar-19 29-Mar-19 12-Apr-19 26-Apr-19 10-May-19 24-May-19 14-Jun-19 28-Jun-19 26-Jul-19 ARS Lecap maturities held by private investors (ARS bn) $42 $29 $50 $49 $43 $43 $38 $29 $28 $6 $29 31-Jan-19 22-Feb-19 28-Feb-19 29-Mar-19 12-Apr-19 30-Apr-19 31-May-19 28-Jun-19 30-Sep-19 31-Oct-19 30-Apr-20 10#11Policy emphasis on domestic capital market development Government securities Increase visibility of financial strategy ✓ Anticipate 2019 auction calendar ✓New market makers program starting in January 2019 Regulatory environment ✓Increase deductibility levels for life-insurance or retirement savings ✓ Eliminate tax barriers on closed-end mutual funds for SMEs financing Increase visibility of reforms in place - - Digital onboarding Qualified investor definition Securitization of digital assets ON Simples 11#121. Financial program 2. Fiscal policy 3. Macroeconomic outlook#13Accelerated convergence to fiscal balance Primary fiscal deficit and targets (% of GDP) -2.2% -2.7% -3.2% -3.9% -4.2% 2017 2018 2019 0.0% -1.2% 2020 1.0% Cumulative reduction of the primary deficit of 4.9% of GDP between 2018 and 2020 13#14Fiscal Targets Quarterly accumulated primary deficit and targets (% of GDP) Target Observed 1.9% OUTPERFORMING FISCAL TARGETS 0.6% 1.1% 0.2% 0.6% 1.3% 0.3% 0.9% 0.3% 1Q18 2018 3Q18 2.7% Fiscal target for 3Q18 was overachieved by 0.6 p.p. 4Q18 14 14#15Eliminating the fiscal deficit in 2019 Primary deficit (national public sector, % of GDP) 2.7% 0.2% 0.7% 0.7% 1.5% 0.0% 2018 Deficit Social benefits Subsidies Capex + transfers + Revenue measures 2019 Deficit other prim. expenditure 15#1623 Primary expenditures reduction Consolidated public expenditure (% of GDP) 24 24 24 24 23 23 24 26 46 1993 1994 1995 1996 1997 1998 1999 2000 25 26 46 2001 2002 22 23 24 25 26 30 29 42 42 38 39 35 37 35 35 34 40 40 39 37 36 35 34 33 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (p) 2019 (p) 2020 (p) 2021 (p) 2022 (p) 2023 (p) Primary expenditure of the provinces and local governments Primary expenditure of the central government Primary expenditures will have declined by 3.2% of GDP by the end of 2018 Public spending is being reduced by 6.2% in 2018 and 8.0% in 2019 in real terms 16#17Primary fiscal results at a provincial level As of 3Q 2017 < -10% of income < -5% of income <0% of income < 5% of income <10% of income > 10% of income Source: Consejo Federal de Responsabilidad Fiscal As of 3Q 2018 # of Deficits: 13 # of Surpluses: 9 # of Deficits: 1 # of Surpluses: 21#18Total fiscal results at a provincial level As of 3Q 2017 < -10% of income < -5% of income <0% of income < 5% of income <10% of income > 10% of income Source: Consejo Federal de Responsabilidad Fiscal As of 3Q 2018 # of Deficits: 14 # of Surpluses: 8 # of Deficits: 6 # of Surpluses: 16#191. Financial program 2. Fiscal policy 3. Strengthened export sector#20Strong traction of monetary policy FX stabilization (ARS/USD, no-intervention zone) Monetary aggregate targets (ARS bn) $50 $1,360 $1,340 Program $45 start date $1,320 I $40 $1,300 $35 $1,280 $30 $1,260 $25 $1,240 $20 $1,220 $15 $1,200 Jan-18 Feb-18 Mar-18 May-18 Jun-18 Aug-18 Sep-18 Oct-18 Dec-18 Sep-18 Sep-18 Sep-18 Oct-18 Oct-18 Nov-18 Nov-18 Dec-18 Dec-18 USD private deposits at all-time highs (USD bn) Monetary policy rate (Leliq, %) 75% $36 $31 70% $26 65% $21 $16 60% $11 55% $6 50% $1 Oct-18 Oct-18 Oct-18 Oct-18 Nov-18Nov-18Nov-18Dec-18 Dec-18 Dec-18 Jan-11 Dec-11 Nov-12 Oct-13 Sep-14 Aug-15 Jul-16 Jun-17 May-18 20#21Export-led growth for 2019 GDP composition (yoy) 0.0% -0.9% -4.6% -10.5% 16.3% -2.7% GDP Private Consumption Public Consumption Investment Exports Imports Growth dynamics in 2019 need to overcome the -3% statistical carryover 21#22Exports performance Exports (LTM, USD millions) $90,000 $85,000 $80,000 $75,000 $70,000 $65,000 $60,000 $55,000 $50,000 Dec-10 May-11 Oct-11 Mar-12 Aug-12 Jan-13 Jun-13 Nov-13 Apr-14 Sep-14 Feb-15 Jul-15 Dec-15 May-16 Oct-16 Mar-17 Aug-17 Export gap due to 2018 draught Jan-18 Jun-18 Nov-18 22#23Sectorial evidence of export growth - Beef exports (Jan - Oct 2018) – '000 tons 554 457 443 360 Lithium exports - USD mm FOB 272 254 205 159 173 176 176 189 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 22 17 28 27 21 27 42 2001 2002 2003 +907% Lithium Carbonate I Lithium Chloride 225 192 175 84 54 63 54 60 60 56 2004 2005 2006 2007 2008 2009 2010 2011 71 55 58 61 2012 83 90 23 244 431#24Reducing the current account deficit Current account deficit (% of GDP) 8% 6% 4% 2% 0% -2% -4% -6% Other Goods Services -Current account -5.2% -2.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (p) (p) External financial needs dropped due to the reduction in the current account deficit Source: INDEC and Ministry of Treasury projections 24#25Improvements in productivity and comptetitiveness Regulatory changes improving business development conditions Simplified incorporation of new companies (1 day) Single Window for International Trade ("VUCE") ✓ Pre-export burocracy fully digitalized ✓ Simplified Exports (up to 300 kg or USD600k a year) Reduce requirements to export services and food Elimination or simplification of several registers ✓ Fully digitalized car transfers Digital background check ✓ Simplified procedures for small tax payers (3M individuals) Digital ID Digital state records (birth, marriage, death certificates) Customs insurance (three days) Annual freight transportation on Belgrano Cargas - Northern line ('000 tons) 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Jan-Oct 2018 volume points towards historic record 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 25#26Ministerio de Hacienda Presidencia de la Nación