These are indicative numbers., since the technical office of the Legislative Branch measures accrued expenses while the IMF is interested in what is called the “cash base”, that is, the money that comes in and goes out per month. The OPC also measures only the National Public Administration, which includes the central administration, decentralized agencies and Social Security institutions. In relation to GDP, in the first quarter the National Administration had a primary red of 0.55% while the financial was 0.92%.
If the current budget is analyzed, the level of execution of the expenditure of the national administration is 28%, with a total of just over $3 billion, compared to a current credit of $10.7 billion. This last figure may undergo changes depending on the adaptation that the Government has to carry out of the projection of expenses and income based on what is established in the agreement with the IMF.
Guzmán will be in Washington this week at the IMF Spring Assembly where he hopes to start discussions on the reformulation of the agreement that the agency’s board approved in March, whose projections were already outdated and impacted by the effect of the war in Ukraine.
The owner of the Treasury Palace it will have to face an IMF that will ask it to “recalibrate” the policies planned to achieve fiscal balance. That is, to maintain the 2.5% primary deficit this year and to take further steps to achieve it. If so, the Government would be forced to obtain higher revenues or reduce expenses or both, seeing the disaster that the war generated in the price of gas that Argentina imports.
Private analysts maintain that the Government could this year compensate for the higher spending in dollars that energy will demand, with more income in hard currency that will generate the increase in the price of cereals. But at the peso level, the withholdings charged to exporters would not compensate for the increase in spending in local currency that will be generated by the rise in tariff subsidies. The money laundering bills for dollar leakers or the initiative promoted by Guzmán for extraordinary income indicate that the Government is trying to compensate for these imbalances on the side of the increase in income rather than by an adjustment in spending.
In this regard, in the first three months of the year, spending on subsidies grew 90% in real terms compared to 2021. They were $305,428 million, of which, most of it was taken by aid to the Administrative Company of the Electricity Wholesale Market, with 86%. The OPC reveals that the degree of coverage of electricity tariff costs went from 43% in February 2021 to 33% in the same period in 2022. In that period, the generation price grew 63%, while the distribution price grew 28%.
If Congress does not approve new taxes, the Government would be forced to lower spending and some governors fear the cuts could go through public works.
On the other hand, If the numbers of the program with the Fund are seen, between January and March the Minister of Economy has to achieve a primary cash-based deficit of the National Public Sector of $222,300 millionyes Unlike the APN, the Public Sector includes financial entities. In principle, heThe first audit in May before the IMF is not at risk and it will be approved, taking into account the change in global financial conditions, but the discussion will be left for the rest of the year.
Source: Ambito
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