the two factors that explain 80% of the fiscal surplus

the two factors that explain 80% of the fiscal surplus

Already entering the second semester, The different actors in the markets expect that the to The fiscal anchor that constitutes the surpluses is losing strength. In fact, it is estimated that the Government will barely be able to achieve a positive primary result in 2024 but not a financial one. Something like getting a draw in a game that started very badly.

The first thing that economists, such as Carlos Rodríguez this week, the thing is not everything is going so well from a fiscal point of view as the president says Javier Milei and his Minister of Economy Luis Caputo.

Of every $100 of the primary surplus achieved in the first quarter, only $17 can be allocated to some type of spending cut or liquefaction specific and may not be permanent. The other $82 was achieved by postponing payments, which is called floating debt, and with the extraordinary collection of this year’s PAIS Tax.

According to data from the Ministry of Finance, between January and April the The financial surplus of the National Public Sector was $1.15 billion, while the primary surplus reached $4.13 billion.


During this period, The PAIS Tax recorded revenues of $2.25 billionand the floating debt generated this year stood at $1.15 trillion.

There are still payments postponed due to $316,697 million in 2023.

In principle, The financial surplus achieved by the Government is basically equivalent to the floating debt of the first part of the year. Most of those payments that have not yet been made consist of transfers, that is, spending on social programs, family allowances, PAMI benefits, Universities, energy and transportation subsidies.

Specifically, it is noted that the majority of the transfer debt is subsidies to electricity generators, which the government seeks to resolve with a bond for $600,000 million, which ultimately continues to be an expense to be paid in the future.

On the other hand, andThe floating debt stock for the first quarter includes $287,351 million in salaries and personnel expenses. There are another $49,602 million in fixed assets expenses.

Floating debt is going down

Even so, It is important to highlight that the stock of floating debt for the first tranche of 2024 is the lowest in the last 11 yearswhich indicates that there was an effort by the economic authorities to correct this budgetary aspect.

The government of Javier Milei received among the heaviest aspects of the “inheritance” of Alberto Fernández and Sergio Massa, a floating debt that in November 2023 had reached the record nominal level of $2.5 million and since then, with oscillations, it had a decline that in five months exceeded one billion pesos.

The amount of floating debt for April It is the lowest so far in 2024 at current values and although in previous years there may be months with lower values, the inflation update makes it clear that the stock had a reduction.

The brokers’ view

When talking about the fiscal front of the Government, Jerónimo Montalvo, from Cohen Argentina, stated in a talk with investors this week that “from a 40-point drop in spending in January, we are now at 24 in April.”

“That was giving way. We have a series of subsidies and social expenses that had a shock at the beginning, which were adjusted, but it was not sustainable. For example, not paying CAMMESA for so long,” she explained. However, she assured that “The fiscal accounts are going to end up positive, but we do not see it reaching financial balance, we see it as very complicated.”

How was the budget execution?

According to Center for Argentine Political Economy (CEPA), last April there was “a sharp drop in real execution compared to the same period in 2023, of around 30%, which implies a significant adjustment of public spending in sensitive areas of the administration.”

“It was verified a large weight of public debt services within the expense structure, in such a way that this function represented no less than 15% of total expenses,” says CEPA.

The report maintains that “were detected strong adjustments in the Superintendency of Health Services (-42%), ANMAT (-14%), national hospitals, and even in the National Cancer Institute (-14%) and the National Disability Agency (-13%)” .

“In scientific matters, the situation is not better, since there were sharp declines in the Ministry of Innovation, Science and Technology and other organizations in the sector such as CONAE, CONICET and CONEAU,” the study states.

It is highlighted that “Social Security organizations are suffering severe cuts in the execution of their budget items”. “In the case of ANSES, the body responsible for Social Security, the cut reaches 26% compared to last year. Cuts of 71% were also detected in the INAES; and 39% in the Secretariat of Children, Adolescents and Family,” warns CEPA.

Source: Ambito

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