He Primary expenditure in the first six months of the year recorded an increase in real terms of 4.6%mainly due to Effect of the retirement update formula that the government implemented from the fiscal package last year.
It should be remembered that Retirements and pensions adjust for inflation but two months late. In a context of price drop such as the one registered in Argentina, that contributes to the expense rising.
For example, June inflation, which was 1.6% monthly will serve to adjust the assets that are accrued in July and pay in August. If in August the CPI is below 1.6%, then the expense of that month in real terms will have risen. The formula It benefits retirees as long as there is a disinflation process, But it can harm them if the road were in reverse.
Currently, the government is clarifying the rise in retirement spending keeping the $ 70,000 bonus for the minimums. That component has already lost 30% since last year.
The rise in retirement expenditure is being compensated with a drop in expenditures in subsidies and general expenses. According to a report of the Argentine Institute of Fiscal Analysis (Iaraf) Between January and June of this year “11 of the 16 components of primary expenditure rose in real terms interannual. ”while 5 came down.
Erogations for the pension system rose so far this year 22.5% in real terms, But given its magnitude, it is the one that most affects the budget.
“Of those expenses with real interannual increase, The one who contributed the most was the expense in retirement and contributory pensions, with a 59%participation, followed by universal allocation with 10%, current transfers to provinces with 10%, goods and services with 8%, among the most participation, ”says the IARAF.
On the other hand, according to the consultant, of those expenses with real year -on -year decrease, “The one that explained the fall the most was the expense in energy subsidies, with 49% of the decline, followed by social programs with 39% and salaries with 8%, among others ”.
Expenditure: What went up the most and what fell the most
The report indicates that “The expenses that uploaded the most were: Capital Transfers to Provinces (199%), Transfers current to Provinces (132%) and universal assignment for social protection (35.7%).
On the other hand, the expenses that fell most were: Subsidies to other functions (63.2%), energy subsidies (62.4%) and social programs (31.8%).
Source: Ambito
