According to the “Expenditure Adjustment Monitor” prepared by the Analytica consultancy, in the third week of December, disbursements fell 43% in year-on-year terms, although they rose 7% compared to the previous week. “In relation to December 2021, the trend of the previous weeks continues to be evident: the adjustment takes place, mainly, in public works, economic subsidies and transfers to the provinces,” says the report. Analytica explains that “the slight increase compared to last month is due to seasonal factors, such as the payment of the half Christmas bonus, and political decisions, such as the bonus for recipients of the Empower Work program.”
Family allowances and the Universal Child Allowance were the only item of spending that increased, with 54.1%. On the other hand, public works fell 85.3% and subsidies 65.3%, among others.
If the evolution of spending in the year is taken, it is clear that there was a strong change in trend from Julyafter the resignation of Martín Guzmán to the ownership of the economic portfolio. Until then, public spending rose by an average of 12% in real terms and the annual trend marked a deviation of the primary deficit of one point of GDP above what was agreed with Kristialina Georgieva in March. In July, upon reaching the fifth floor of the Palacio de Hacienda, Sergio Massa gave management a dose of orthodoxy and thus managed to redirect the agreement with the Washington-based body.
Despite this, the Congressional Budget Office (OPC) warns in a recently published report that the so-called “floating debt” of the National Administration registered a growth of 255% between January and October.
“The floating debt is a liability of the State that represents certain obligations pending payment” and is made up of “the expenses made in a certain period that for various reasons have not yet been paid”, explained the OPC. That heading of the liability towards October already added $1.1 trillion, which is 95% higher than it was in December 2021. On the other hand, in the first 10 months of last year, the accumulated amount was $310,061 million. The OPC indicated that “from the moment the expense is accrued and until the payment is made, there is an obligation pending payment that constitutes the floating debt.” In other words, since the agreement with the IMF only contemplates the cash basis (inflows against outflows), the floating debt is not taken into account. But if the government had not postponed payments, the goal of the fiscal deficit would not be reached this year.
Meanwhile, the Libertad y Progreso Foundation considers that Economy has erroneously recorded the liabilities generated by the September Soy Dollar program. The differential exchange rate of $200 for the field to liquidate US$7,646 million generated a loss to the BCRA of US$2,962 million that was covered by the Treasury with a bill. That letter, Libertad y Progreso points out, is equivalent to about $436,000 million, it should have been registered as a current expense, although it was made “below the line”, that is, as a non-current liability that does not compute for the primary deficit.
Source: Ambito
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