Although the Government has tried until now to be careful on the fiscal front, there has been a sharp deterioration in income due to the drought. The deficit took a sharp jump.
In the first nine months of this year, accumulated primary spending fell 5.1% in real terms if compared to the same period in 2022. The data suggests that, at least until that moment, the measures ordered by the Ministry of Economy had not had a greater impact. Something that may change with the October numbers.
According to the Treasury Palace, In September, a primary fiscal deficit of $380,473 million was recorded, which were the product of current income of $3.2 billion and current expenses of $3.6 billion. This implies that in the first case there was a nominal increase of 95% and in the second of 129.8% compared to an annual inflation of 138.3%.
Official data confirm that the Treasury Palace was making a real cut in spending throughout 2023 but that it fell far behind what was necessary to limit the fiscal deficitabove all because there was a collapse in tax revenues. This has to do with the fact that to close 2022 there was an advance of income that corresponds to this year, such as the extraordinary payment of the Income Tax and the soybean dollar that took export settlements from the first quarter to the last of last year. Added to this, the drought meant that income was well below what was expected.
ANDSo far in 2023, according to official data, the Government has accumulated a fiscal deficit of $2.6 trillion, a figure that would be covered with the net financing accumulated so far by the national Treasury through debt tenders in pesos. Primary spending in that period was already at $23.3 billion.
It is also true that trying to compare the 2023 fiscal front with last year’s is somewhat more complex than usual, depending on changes in conditions. One of them, for example, comes from the fact that in 2022 current income from “property income” could be counted as a product of the primary placement of bonds, which leaves an accounting profitability. Last year it was 0.3% of GDP, and this year it cannot be counted. For example, the official return reveals that for this resource last year there was a small fiscal surplus of $5,284 million, which compared to this year’s loss shows an absurd growth of 7,500%.
The Ministry of Economy explained that “for the January-September period, the impact of the drought on the revenue associated with export duties that the National State receives, represented an approximate drop of more than $1.1 billion (0.7% of GDP) with respect to the projections contained in the 2023 Budget Law.” “If this decline had not occurred, the primary deficit of the National Public Sector accumulated between January and September would present an improvement of the same magnitude,” the official statement states.
Source: Ambito
