With a view to the end of 2022the CEPA says that if the accounts of the National Public Sector behaved until December with the same seasonality that they had in the last five years, the Government should do an additional correction of $343,564 million to reach the December goal of $1.88 trillion, either by increasing income, decreasing expenses or both at the same time. On the other hand, if it were to move as in 2021 (in the electoral year) it would have to achieve an additional fiscal improvement of $674,517 million. The study considers that the first scenario is the most likely in light of the adjustment that was published on Monday in the Official Gazette, which meant a cut of $200,000 million in different programs that the Government had been executing.
Gabriel Caamaño, an economist at the Ledesma consultancy, considered that the economic team “has to adjust more because what is announced is not enough.” He believes that the Government has to carry out a cut in the deficit equivalent to 1 point of GDP until the end of the year, and with what was announced this week it reaches 0.4 points, so that there would be 0.6 points ahead. “What has been done so far is what Silvina Batakis announced, to stop spending, but under the terms of the agreement with the Fund, they do not have much room to increase the floating debt,” she explained.
For his part, Martín Calveira, economist at IAE, the business school of the Austral University, similarly stated that the Government still has a lot of cloth ahead of it to cut in public accounts, although with many limitations of a political nature and some of a technical nature. “You have to do a fine tuning,” explained the analyst. He considered that “you cannot make cuts in public investment.” The professional estimated that the adjustment that should be made “is not possible in the short term.” He believes that what this and the next government should do is reduce subsidy items. “For this, we must transform social plans into employment,” he explained. For the professional “the goals with the IMF are complicated” while the cuts announced by Massa so far “are makeup.” For example, he pointed out that the reduction of energy subsidies also has serious limitations because it is inflationary in the current context with a CPI traveling at 90% per year.
The consulting firm Ecolatina estimates that the cut that became known on Monday through a modification of the Budget is equivalent to only 0.15% of GDP. He maintains that since this year’s budget was modified with an inflation of 76% based on market estimates and it is already at 90% per year, it was expected that nominal spending would rise to maintain it in real terms. “On the contrary, the authorities decided to make a cut in nominal terms for the first time, which clearly implies an adjustment of spending in real terms for the remainder of the year,” the private report states.
Source: Ambito
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