Financial Program

January 7, 2019

Executive Summary

2

• 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.

3

1. Financial program

2. Fiscal policy

3. Macroeconomic outlook

Financial Program 2019

4

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 3.8 Domestic market 0.0

Bonar ´24 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) 19.1 Letes (private) 8.8

Letes in USD 9.7 Letes in USD 4.5

Letes in ARS 9.4 Letes in ARS 4.3

Nota: Totals may not add up due to rounding of intermediate figures.

5

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 22.5 22.5

Principal payments (private) 2.6 7.5 10.1 Private financing 1.7 1.7

International Bonds 2.8 2.8 International market 0.0

Global ’19 2.8 2.8

Domestic Bonds 2.6 1.2 3.8 Domestic market 0.0

Bonar ´24 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 3.6 3.6 IFIs (ex-IMF) 4.6 4.6

IADB + World Bank + CAF 1.7 1.7 IADB + World Bank + CAF 4.4 4.4

Other 0.2 0.2 Other 0.2 0.2

Paris Club 1.7 1.7 Club de Paris 0.0

Letes (private) 9.4 9.7 19.1 Letes (private) 4.3 4.5 8.8

Letes in USD 9.7 9.7 Letes in USD 4.5 4.5

Letes in ARS 9.4 9.4 Letes in ARS 4.3 4.3

Note: Totals may not add up due to rounding of intermediate figures. A portion of primary spending is carried out in USD.

Financial Program 2019 by currency

6

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 10.5 Domestic market 15.2

Bonar ´24 1.1 Refinancing 10.5

Bonar '20 2.5 New financing 4.7

Bopomo ’20 1.9

ARGDUO ´20 1.6

Bogato ´20 0.9

Bonte 2020 (banks only) 1.9

Others 0.4

Repo 1.2 Repo 0.9

IFIs Principal Payments 3.0 IFIs (ex-IMF) 3.0

Letes (private) 9.4 Letes (private) 9.4

Letes in USD 4.5 Letes in USD 4.5

Letes in ARS 5.0 Letes in ARS 5.0

Nota: Totals may not add up due to rounding of intermediate figures.

Financial Program 2020

Principal payments by bondholder type

USD bn Public Sector Private Sector Total

2019

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 2.7 4.0 6.7

BIRAF/CHF/3.375%/12-10-2020 0.0 0.4 0.4

BONAR/USD/8.75%/2024 0.1 1.1 1.2

BONAR/USD/8%/08-10-2020 0.5 2.5 3.0

BONAR 2020/USD/29-05-2020 2.1 0.0 2.1

Bonds in ARS 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.

Evolution of the USD Letes Program

8

$7.9 $6.8 $6.4 $5.8 $5.3 $4.4 $3.7

$2.4 $2.6 $2.1 $1.7 $1.6

$9.2

$8.6 $8.8 $9.3 $9.5 $9.4

$9.3 $9.4 $8.6

$8.6 $8.5 $8.1

$17.1

$15.4 $15.2 $15.1 $14.8 $13.8

$13.0 $11.8

$11.2 $10.7

$10.1 $9.7

Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18

Domestic investorsForeign investors

Letes stock in USD held by private investors (USD bn)

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.

Converting USD debt to pesos

9

$17.1

$15.4 $15.2 $15.1 $14.8

$13.8 $13.0

$11.8 $11.2

$10.7 $10.1

$9.7

ARS37 ARS37

ARS59

ARS81 ARS85

ARS81 ARS81 ARS115

ARS202

ARS350 ARS367

ARS386

Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18

Letes USD

Lecaps ARS

Letes and Lecaps held by private investors (USD bn)

10

ARS Lecap maturities held by private investors (ARS bn)

USD Letes maturities held by private investors (USD mm)

$819

$459

$926

$418

$691 $601

$851

$1,008 $1,006

$731 $717 $760

$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

$42

$29

$50

$29 $28

$38

$43

$6

$49

$43

$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

Conservative maturity profile

Policy emphasis on domestic capital market development

11

Increase visibility of financial strategy

Anticipate 2019 auction calendar

New market makers program starting in January 2019

Government securities

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

Regulatory environment

12

1. Financial program

2. Fiscal policy

3. Macroeconomic outlook

13

Accelerated convergence to fiscal balance

Cumulative reduction of the primary deficit of 4.9% of GDP between 2018 and 2020

Primary fiscal deficit and targets (% of GDP)

-4.2%

-3.2%

-2.2%

-1.2%

-3.9%

-2.7%

0.0%

1.0%

2017 2018 2019 2020

14

Fiscal Targets

0.6%

1.1%

1.9%

2.7%

0.3%

0.9% 1.3%

1Q18 2Q18 3Q18 4Q18

Target Observed

0.3%

0.2%

0.6%

OUTPERFORMING FISCAL TARGETS

Quarterly accumulated primary deficit and targets (% of GDP)

Fiscal target for 3Q18 was overachieved by 0.6 p.p.

15

Primary deficit (national public sector, % of GDP)

Eliminating the fiscal deficit in 2019

2.7% 0.2%

0.7%

0.7%

1.5%

0.0%

2018 Deficit Social benefits Subsidies Capex + transfers +other prim.expenditure

Revenue measures 2019 Deficit

16

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

Consolidated public expenditure (% of GDP)

23

24 24

23 23 24 26 25 26

22 23 24 25 26 29 30

35 34 35 37

38 39 42 42

40 39 37 36 35 34 33

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

(p

)

20

19

(p

)

20

20

(p

)

20

21

(p

)

20

22

(p

)

20

23

(p

)

Primary expenditure of the provinces and local governments Primary expenditure of the central government

Primary expenditures reduction

As of 3Q 2017 As of 3Q 2018

< -10% of income

< -5% of income

< 0% of income < 5% of income

< 10% of income

> 10% of income

# of Deficits: 13 # of Surpluses: 9

# of Deficits: 1 # of Surpluses: 21

Source: Consejo Federal de Responsabilidad Fiscal

Primary fiscal results at a provincial level

< -10% of income

< -5% of income

< 0% of income < 5% of income

< 10% of income

> 10% of income

# of Deficits: 14 # of Surpluses: 8

# of Deficits: 6 # of Surpluses: 16

Source: Consejo Federal de Responsabilidad Fiscal

As of 3Q 2017 As of 3Q 2018

Total fiscal results at a provincial level

19

1. Financial program

2. Fiscal policy

3. Strengthened export sector

20

FX stabilization (ARS/USD, no-intervention zone)

$15

$20

$25

$30

$35

$40

$45

$50

Jan-18 Feb-18 Mar-18 May-18 Jun-18 Aug-18 Sep-18 Oct-18 Dec-18

Strong traction of monetary policy

Monetary aggregate targets (ARS bn)

$1,200

$1,220

$1,240

$1,260

$1,280

$1,300

$1,320

$1,340

$1,360

Sep-18 Sep-18 Sep-18 Oct-18 Oct-18 Nov-18Nov-18 Dec-18 Dec-18

Program start date

Monetary policy rate (Leliq, %)

50%

55%

60%

65%

70%

75%

Oct-18 Oct-18 Oct-18 Oct-18Nov-18Nov-18Nov-18Dec-18Dec-18Dec-18

USD private deposits at all-time highs (USD bn)

$1

$6

$11

$16

$21

$26

$31

$36

Jan-11 Dec-11 Nov-12 Oct-13 Sep-14 Aug-15 Jul-16 Jun-17 May-18

Export-led growth for 2019

GDP composition (yoy)

21

Growth dynamics in 2019 need to overcome the -3% statistical carryover

0.0%

-0.9%

-4.6%

-10.5%

16.3%

-2.7%

GDP PrivateConsumption

PublicConsumption

Investment Exports Imports

22

Exports performance

Exports (LTM, USD millions)

$50,000

$55,000

$60,000

$65,000

$70,000

$75,000

$80,000

$85,000

$90,000

Dec

-10

May

-11

Oct

-11

Mar

-12

Au

g-1

2

Jan

-13

Jun

-13

No

v-1

3

Ap

r-1

4

Sep

-14

Feb

-15

Jul-

15

Dec

-15

May

-16

Oct

-16

Mar

-17

Au

g-1

7

Jan

-18

Jun

-18

No

v-1

8

Export gap due to 2018 draught

Beef exports (Jan - Oct 2018) – ‘000 tons

23

457 443 360

554

272 205

159 173 176 176 189 254

431

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

22 17 28 27 21 27

42 54 63 60

84 56

71 55 58 61

83 90

192 225

175

244

19

98

19

99

20

00

20

01

20

02

20

03

20

04

200

5

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

201

6

20

17

Jan

-oct

201

7Ja

n-o

ct20

18

Lithium Carbonate Lithium Chloride

Lithium exports – USD mm FOB

+907%

Sectorial evidence of export growth

Reducing the current account deficit

Current account deficit (% of GDP)

24 Source: INDEC and Ministry of Treasury projections

External financial needs dropped due to the reduction in the current account deficit

-5.2%

-2.0%

-6%

-4%

-2%

0%

2%

4%

6%

8%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018(p)

2019(p)

OtherGoodsServicesCurrent account

25

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

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

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)

Regulatory changes improving business development conditions

Annual freight transportation on Belgrano Cargas – Northern line (‘000 tons)

Jan-Oct 2018 volume points towards historic record

Improvements in productivity and comptetitiveness

26