In February the deficit returned to public accounts, according to provisional figures

In February the deficit returned to public accounts, according to provisional figures

In fact, according to numbers from the Open Budget official sitelast month there would have been a financial deficit of the National Public Administration (APN) of $294,444 million, which implied a contraction of $1.5 billion compared to the surplus that had been achieved in January.

The number in itself is not large for the state’s finances, but does turn on a yellow light regarding the official story on the soundness of public sector finances and the supposed capacity of the Government to be able to sustain the program based on spending cuts.

The information must be qualified. The APN does not include the entire National Public Sector (SPN) and the Open Budget data is on accrued spending, that is, on the expenses that were authorized during the period, although this does not imply that they have already been paid. That appears in the “cash basis” line.

In fact, data from the same site warn that in the first two months the Nation’s debt with the provinces increased by $101,000 million, which corresponds to transfers accrued but not paid.


“Everyone knew that in February the results were going to be different than in January.”“, he commented to Ambit he Corrientes senator Martín Barrionuevo. The legislator belongs to the Corrientes de Todos Front and points out that “it is still positive that they have a primary surplus, although this is going to be reversed.”

Barrionuevo, who is an economist, indicated in a report that Last month the APN’s income totaled $4.9 billion, while primary expenditures were $4 billion, so that There was a primary surplus of $848,053. But $1.14 billion in interest was paid, leaving a financial deficit of $294,444 million.

Compared with January, and based on the Open Budget, income fell by $745,000 millionprimary spending rose by $962 billion, the primary result deteriorated by $1.7 trillion, less interest was paid by $207 billion, and the financial result deteriorated by $1.5 trillion.

The Corrientes senator explained that, “in March, the G“The government has to pay the 27% increase to retirees, which will have a strong impact on public finances,” From which it follows that, until the fiscal package proposed by the Minister of Economy, Luis Caputo, is approved, the deterioration is likely to continue.

The attentive financial market

In the financial markets, the evolution of the national public sector accounts is closely followed. The operators are quite clear that the January result, which included $2 trillion in primary surplus and $518 billion in financial surplus, was just an exception achieved by paying almost nothing.

January is a month that has low seasonal execution and Caputo only had to tighten the tap even more to prevent the funds from running out. He still maintains the same numbers from the extended 2023 budget and, in some cases, such as universities, has sent the same amount of money as last year.

Although the shorter APN data begins to show some trend that would not be good for the government’s intentions for 2024, among the brokers It is understood that February on a cash basis will continue showing good numbers, although not as loose as in the previous month.

“Between January 31 and February 29, the Public Sector deposits grew by $2.7 billion, explained by interest for $0.5 billion and ‘other’ factors for $2.2 billion. Based on what happened in January, we suspect that this ‘other’ factor could be reflecting a more than decent primary surplus in February for the Public Sector,” says Porfolio Personal Inversiones (PPI).

Pedro Siaba Serrate, Head of Research & Strategy at PPI, commented to this medium that “We are waiting, based on that signal, that in February the Treasury can repeat a good result, despite the fact that the big factors that explained the great result in January are softening.” The brokerage company says they do not have more detailed data on interest payments.

Spending contracts, minus interest

He Scalabrini Ortiz Center for Economic and Social Studies (CESO) informs for his part that “In February, the accrued expense was $5,212,777 million, with a real contraction of 33% compared to the same month last year, which implies an even greater adjustment than the 10% in January.”

As a fact worth highlighting, it also states that interest payment expenses registered a real increase. “The only purpose that a increase in real terms (above inflation) are the expenses allocated to the public debt (+26% so far this year)”, indicates the entity.

In magnitude, the report points out, “the greatest adjustment occurs in Social Services ($1.4 billion in February and $3.2 billion accumulated in the year), although in percentage terms, “The biggest adjustment falls on Economic Services (subsidies), with a reduction of 60%.”

“The level of execution reached 24% in just two months as a consequence of not having an updated budget for the year 2024. The debt has already used 56% of the budget for the entire year and the Judiciary 30%,” the report states.

Source: Ambito

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