The government of Javier Milei had to relax the intensity of the spending cuts to the provinces. The impetus with which the year started gave rise to a more pragmatic policy, and so While in January he had sent almost no money to the interior of the country, by May the harshness of the adjustment was decreasing
It is something to take into account that in the first month of the year the level of accrual and specific payments of discretionary transfers is much lower than the rest of the year, but you can still estimate how it behaved over the following four months.
The Economist Nadin Argañaraz developed an index that allows estimating the intensity of the adjustment taking into account the base value of January, comparing with the accumulated one.
If the accumulated to May of the year-on-year cut of shipments of discretionary transfers is lower than the January comparison against the same month of 2023the index will be less than the value 1‘, if it exceeds it, it is above unity, and if it is equal, it will maintain the value.
From this it emerges that as the year went by the government began sending more money from non-automatic transfers to 21 provinces.
The most benefited is the City of Buenos Aires, which started with a 100% year-on-year adjustment and is now 17%, which gives it an index of 0.17 points. At the other end is Corrientes, which started with only 27% adjustment and is now at 88%, which leaves 3.28 points.
“Only three jurisdictions had the intensity of the cut increased of Corrientes, Chubut and Córdoba funds,” the private consultant states in his report.
Argañaraz highlights that “the most negative is Corrientes, jurisdiction that at the beginning of the year had a real interannual cut of 27%, and at the end of May one of 88%.” “The second is Chubut, which went from an interannual cut of 31% to one of 73%.The third is Córdoba, which went from 92% cut to 97%,” says the study.
Meanwhile, among the other Santa Cruz and Jujuy are the most benefited. The first started with a 100% cut in January and is now at 63%, while the second also started at 100% and is now at 73%.
As for the expense accrued by transferThe situation is different, which indicates that in the future the government could once again adjust the intensity of the cut. The accrued expense is understood to be computed from the moment the government’s payment obligation arises.
From the analysis it emerges that In 18 jurisdictions, the national government increased the intensity of the accrued cut of funds throughout the first five months.
Only two jurisdictions, CABA and Santa Cruz, were reduced. To the Province of Buenos Aires maintained it. The The most benefited again is CABA, jurisdiction that at the beginning of the year had a real year-on-year cut of 77%, and at the end of the first 5 months one of 39%.
The second is Santa Cruz, which went from a year-on-year cut of 54% to 46%. Buenos Aires remained at 77%.
At the other extreme, theThe province in which the intensity of the adjustment increased the most was Corrientes. From an interannual cut of 15% in January it went to 86% at the end of May.
They are followed by Tierra del Fuego and Neuquén, to complete the list of provinces that saw the intensity of the adjustment increase the most as the months went by. “What is clearly seen is that the national government was increasing the intensity of the adjustment with the provinces as the months went by,” indicates Argañaraz’s study.
The government began the year with a reduction in discretionary transfers to the provinces of 98% in the stage called “paid”, which included the Teacher Incentive Fund, among other cuts. Now it is at 86%.
On the accrued expense side, the year had begun with an adjustment level of 62% compared to the same period last year and closed the fifth month at 79%.
Source: Ambito
