The OPC analysis shows a continuity in the reduction of spending during October. Despite the 4% contraction in revenues, mainly attributed to the drought, the accumulated accrued primary deficit was reduced by 11.7%.
On the other hand, the financial deficit decreased in constant terms by 44.8%.
The recent report of the Congressional Budget Officeo (OPC) reveals a constant trend in the reduction of government spending. In October, a real drop was evident 4.6% in it total expenditure of the National Administration compared to the same period of the previous year. This decrease is added to the accumulated adjustment of 4.3% during the first ten months of the current year.
These data, which anticipate the next report of the Secretary of Finance scheduled for Nov. 21, they represent an outlook on the October deficit. It is important to note that these calculations are made on an accrual basis, which excludes floating debt and may vary with respect to the data that the Treasury will disseminatebased on cash figures.
The report highlights a fall of 11.7% in the primary deficit between January and October, in real terms. The Government seeks to align with the fiscal goal of the IMF, which requires a primary deficit of 1.9%a goal that seems difficult to achieve, since in the first nine months of the year the deficit reached 1.5%.
Fiscal deficit: what the report says
The OPC analysis shows a continuity in the reduction of spending during October. Despite the 4% contraction in revenue, mainly attributed to the drought, the accumulated accrued primary deficit was reduced by 11.7% with respect to the previous year. This result is reflected in figures: The financial deficit, excluding debt services, registered a nominal increase of 103.6% but a fall of 6.9% at constant values.
The spending adjustment was manifested in specific areas cas family allowances and energy subsidies, with decreases of 28.5% and 25.8% respectively. These cuts came despite a decline in revenue, primarily due to drought and lower export duties. In year-on-year terms, tax revenues contracted by 9.9%, highlighting the significant reduction in Export Duties, which decreased by 63.8%.
October data show an increase in the deficit compared to the same month of the previous year, exceeding income by $68,319 million, which represents a real increase of 27%. On the other hand, the financial deficit decreased in constant terms by 44.8%.
However, analysts consider that this fiscal adjustment is not enough to meet the goals agreed with the IMF, which require a primary deficit close to 1.9% of GDP. It is estimated that, despite the measures implemented to mitigate the economic situation, The deficit would close the year at 3%, plus an additional 2% in the case of the financial deficit.
Source: Ambito
