These are the deficit data from January to November. They represent 1.71% of GDP, not far from the IMF’s 1.9% goal. Although in December spending increases. Last month, revenue from 5G telephony helped.
In the first 11 months of the year the total public sector deficit reached $6 billion. Added to the December result, which should be above $500,000 million, is the starting point of the adjustment that President Javier Milei proposes to make. The last month of the year is seasonally one of higher expenses and therefore the deterioration of the accounts increases. In terms of GDP, Alberto Fernández left 1.71% in primary red, something that does not seem so far from the 1.9% signed with the IMF.
During the past month, the National Public Sector (SPN) registered a primary deficit of $210,484.4 million. On the other hand, a financial loss of $754,956.4 million was verified, as a result of the payment of interest on the public debt net of intra-public sector payments, which reached $544,472.0 million. In the January-November period, the SPN had a negative primary balance of $3.1 trillion, according to reported the Ministry of Economy.
This scenario constitutes the starting point of the current Government, which seeks to correct the distortions through a strong fiscal adjustment of 5 points of GDP during 2024.
According to official information, last month the total income of the public sector reached $2.46 trillionwhich implied a year-on-year growth of 173.2% year-on-year, above the inflation of the period. On the other hand, with regard to tax collection, it showed a growth of 150.5%below the evolution of prices.
In this sense, it stands out that in his last month of administration Alberto Fernández managed to add a total of $294,868 million to revenues corresponding to the tender for 5G bands mobile phone. Thanks to this, the State’s non-tax income grew 516.7% to $334,517 million.
As highlighted by the Argentine Institute of Fiscal Analysis (IARAF), The primary deficit in November “fell 64.6% in real terms compared to the same month in 2022.” “This was a consequence of the fact that total national income increased by 4.7% real year-on-year and primary spending fell by 4.9% year-on-year,” indicates the IARAF. ANDThe work of economist Nadín Argañaraz specifies that “by excluding the extraordinary income from the 5G tender, the primary deficit would decrease by only 15% in real terms and total income would decrease by 4.3%.”
The private study estimates that, If Javier Milei wanted to get the numbers back on track so that they are in line with the IMF, he would have to reduce the deficit by 0.19 points in December. To do this, it would have to make an adjustment of 0.4 points compared to last year’s result, which was negative 0.6%. It is not easy to do it in December, a month in which expenses increase for the payment of bonuses for retirees and State employees. The IARAF estimates that, if this adjustment were to be made only by controlling spending, it would have to fall 9.1% compared to December 2022.
How did the numbers evolve in the last 11 months of Alberto Fernández, with Sergio Massa as Minister of Economy? Real primary spending fell 4.8% year-on-year with significant decreases in family allowances (38.7%), energy subsidies (29.7%) and non-contributory pensions (19.6%). The three expenditures that increased the most were subsidies for other functions (102.7%), capital transfers to provinces (32.6%) and Social Programs (23%). For their part, the Real total income fell 5.8%, and the deficit turned out to be 5% lower in real terms compared to the same period in 2022.
Source: Ambito
