Following the latest budget modification made by the Government this week, in which it increased both resources and expenses, The National Public Administration (APN) began to register an operating deficit of $3.4 billionwhich would last for the whole of 2024 if no further adjustments are made throughout the year.
The analysis corresponds to the Congressional Budget Office and refers to the impact of DNU/594, by means of which Budget credits totaling $39 billion were added.
As the current budget is an extension of the 2023 one, At the beginning of the exercise it presented an operating deficit of $9.2 billion. That is to say, with the latest changes, it was possible to reduce it to less than half.
Javier Milei promised balance
In this regard, the president Javier Milei reaffirmed his commitment to a balanced budget, speaking at an event marking the 170th anniversary of the Buenos Aires Stock Exchange. Milei praised Minister Luis Caputo, whom he defined as “a giant” for having reduced the inflation rate and as “the best Minister of Economy in the entire history of Argentina.” And he warned that “if the degenerate prosecutors” of Congress “want to pass laws that go against the balanced budget,” he will “veto them all.”
Although the APN does not include the entire National Public Sector (SPN) The numbers show the government’s trend in relation to the management of public funds. The formal numbers, in principle, bear no relation to the real ones: while Milei reiterates ad nauseum that fiscal balance is non-negotiable and the public accounts show primary and financial surpluses, the extended budget shows a financial deficit of more than $7 billion.
With the latest changes, total Current Revenue was $86.8 billion against Current Expenditure of $90.1 billion. That leaves an operating deficit of $3.4 trillion. But when Including other income and capital expenditure, this results in a primary surplus of $3.7 billion and a financial deficit of $7 billion.
There will be news with the June fiscal result
Next Tuesday, July 16, the Ministry of Economy will announce the data from the SPN on a cash basis, which is what the International Monetary Fund (IMF) looks at.
Although Milei himself had been anticipating that it could happen in June a first deficit resultat least financially, there is speculation within the Government that this would not be the case. In radio statements, the Minister of Economy, Luis Caputo said that “despite paying bonuses, June will be another month of surplus”
In the sixth month of the year the public administration registers an increase in expenses due to the payment of bonuses to public employees and retirees. Furthermore, this year there was a real 14% drop in tax revenue. All of this justifies Milei’s prediction of a potential negative result.
But Government sources have hinted that the government could pull a new “rabbit out of the hat” which would allow you to improve the appearance of the accounts. These are the subsidies to electricity generators, which the Government has once again stepped on, after having arranged the payment of debts with a bond to 2038. If the total floating debt is analyzed until May, there are $500 billion this year in transfers.
Source: Ambito
