“I designed a format that is not vulnerable to changes in the macro (economy),” The president pointed out Javier Milei to its environment in reference to the elaboration of the project of national budget for 2025as he told Scope a high official source. The president is currently personally involved in the preparation of this project, which is expected to be sent to Congress before September 15.
From this point of view, they explain that the intention of the first president is that, if for some reason the income were underestimated and in practice the resources of the State were higher than those expected, These surpluses will be used to lower taxes and not to increase spending, as has been done historically.
In the opposite scenario, that is, if the income estimate is lower than the actual one, the decision It will be cutting items because, of course, keep the financial deficit at zero (including payment of interest on debt) It is a central objectivethey point out in official media.
But they anticipate that these eventual cuts will not affect expenditures that the Government considers “rigid”, such as, for example, the pensions for the most needy sectors.
He “There is no more money” It was not just a campaign slogan. As officials often say, for example, at the Cabinet meeting on Tuesday in response to some requests for increased funding, the categorical response of the president, Milei, was “The one who has the last word is Toto Caputo.”
In this way, the head of state breaks an old tradition in politics: requests for money that were denied at the Treasury often received presidential approval.
Official estimates of growth and inflation, among other economic variables, are not yet known, but private projections speak of growth of around at 5% and inflation for the year of 45/50%.
Reservations
Regarding the exchange rate policy, The priority will not be the accumulation of reserves to the detriment of other policies. These will be the result of the trade surplusSome specialists estimate that there may be a considerable inflow of foreign currency from the RIGI or even from money laundering, which could lead to an appreciation of the peso.
The intention of the Executive It is not to issue to validate said income but to allow the circulation of other currencies, in what the President usually calls “currency competition”.
That is, other currencies can be used for payments, a practice that is not unusual in a country that historically hoards dollars as a safeguard for its savings.
The Executive’s initiative “will propose fiscal goals that are based on maintaining policies that support aggregate demand and an increase in fiscal resources along with an increase in activity, employment and real income, giving sustainability to the growth path in a context of fiscal deficit reduction,” as reported at the beginning of last month in the Progress Report on the Preparation of the Draft General Budget Law of the National Administration for Fiscal Year 2025.
Criteria
The Government is currently preparing its revenue and expenditure forecast for next year taking into account four fundamental criteria: the maintenance of fiscal balance, the granting of social plans without intermediaries, the modernization and simplification of the State, and an increase in the allocations for defense and security.
The projections of the Casa Rosada contemplate sustained fiscal balance, deceleration of inflation, improvement of the Central Bank’s balance sheet and strengthening of international reserves.
It is hoped that next year “the conditions of macroeconomic stability will be maintained that will allow the definitive takeoff of the country’s productive potential, generating a favorable environment for the increase of private investment, an improvement in productivity, and the growth of activity, employment and income.”
The authorities point out that it is a priority to continue with the zero deficit policy, strengthening the effectiveness and efficiency of public spending and emphasizing the reduction of political spending to give priority to sustaining the income of the most vulnerable sectors.
In this sense, the Executive ratifies the policies designed by the Ministry of Human Capital, which leads Sandra Pettovelloaimed at eliminating intermediation in plans, expanding social assistance to mothers and children in the most vulnerable sectors and protecting the purchasing power of pensions.
Regarding the role of the State, the official strategy is aimed at “making a modern, effective, efficient, simple and useful State for citizens, engaged in its essential functions so as not to hinder the conditions for the development of the private sector, favoring free enterprise.”
In this sense, the tasks carried out by the Ministry of Deregulation and Transformation of the State, headed by Federico Sturzeneggerwhich seek to simplify actions and processes, digitizing and simplifying procedures, debureaucratizing and eliminating intermediaries.
As for the security and defense forces, The aim is to improve equipment both to maintain territorial sovereignty and to improve internal security by strengthening crime prevention and the investigation of organised crime.
The authorities are also preparing the quantitative data that the project will contain (inflation and growth, among others). Official sources indicate that, given the achievements in fiscal matters in recent months, the budget 2025 “will be for the first time in many years a real roadmap”.
Source: Ambito
