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The external current account deficit decreased from 4.8 percent of GDP in 1998 to 4.4 in 1999 due to a sharp decrease of imports and was expected to decline further to 3.6 percent of GDP in the following year. More than half of the external account deficit was financed by net foreign direct investment. Argentina's total foreign currency debt became five times the size of its foreign currency receipts from exports of goods and services. External debt climbed to 50 percent of GDP in 2000. Trade balance shifted to a surplus of US$896 million in the first half of 2000, from a deficit of US$397 million in the same period of 1999 as a result of increased competitiveness, a gradual recovery of trade, a slow increase in imports, and a 14 percent increase in exports. .
In 1999, public finances deteriorated resulting in a weakening of tax compliance, a growing interest bill, and spending overruns at both the federal and the provincial government level. The consolidated public sector deficit doubled to 4.1 percent of GDP. The public sector debt increased from 41 percent of GDP the year before to 47 percent. In December 1999, the government designed an economic program aimed at reaching fiscal balance by 2003. It included a sizable tax package, with increases in the personal income and wealth taxes and in excises, and a broadening of the base of the VAT; a bill to strengthen tax enforcement; a tax amnesty; and a cut in non-interest expenditures equivalent to almost one percent of GDP. Nominal wage reduction in the public sector, were taken to ensure compliance with the overall deficit ceiling under the FRL. Despite significantly lower tax revenues and higher interest payments than originally projected, the measures helped Argentina meet the program target for the federal deficit. .
The banking system has weathered well through the recession. In the first seven months of 2000, private sector deposits in the finacial sector increased by more than 7 percent and foreign lines of credit were maintained.