The Government will give to to learn this Friday the data of the National Public Sector (SPN) which are expected to produce the first negative fiscal data of the year. July is expected to close with a financial deficit as a result of the payment of bond coupons.
The news was already anticipated by the minister of Economy, Luis Caputo, at the beginning of this month when he met with the top executives of stock exchange companies. The official told them that he had to face the payment of due amounts in dollars.
Despite this, The Government guaranteed that the year will close in balancebased on the fact that the primary surplus was maintained last month.
The Government’s Chainsaw
According to data from the Argentine Association of Budget and Public Finance (ASAP)this year the Government is carrying out the lowest budget execution in the last decade. It is under-executing the items 11 points below the average for that period.
In July, already halfway through the year, logic dictates that the executed expenditure must be above 50% of the authorized credit. It should be remembered that, this year, The Government is using the same 2023 budget, to which the allocations have been expanded.
The Expenditures scheduled so far are $94 billion and it is believed that the central administration will not substantially modify it until the end of the year. The ASAP report states that, so far, 47.2% of the authorized amount has been spent, while the average since 2015 for July is 58%.
The highest level of execution for the first seven months of the year was reached in 2020, with 66%, in the context of the pandemic, which forced the Government to increase public spending far above what was planned. The second lowest level of budget execution is held by Martín Guzmán, Alberto Fernández’s former Minister of Economy, with 53.2% in 2022.
“In the cumulative period from January to July, the National Administration accrued 47.2% of the current budget, which includes the extension of spending authorizations, approved by Decree 280/2024 of March, Decrees 594/2024 and 656/2024 of July, and administrative decisions 284/24 and 470/24,” ASAP states.
There was a record surplus in the accrual
The Government will face a Paradox in the presentation of the July fiscal resultssince the accrual will show the highest financial surplus in recent years andn nominal terms (and the largest in history in real terms).
The The apparent contradiction with the cash basis is due to the fact that the government had to face a series of expenses last month that had not been paid in previous months.which not only generated a significant gap between the accrued and paid results, but also an increase in floating debt.
According to dAccording to ASAP data based on official data, July closed with a primary surplus of $2,242,068 million, 4,134.7% more than that obtained in the same month last year. ($52.945 billion) and a financial deficit of $2,119,423 billion, a performance that is unrelated to the deficit of $274,491 billion in July 2023.
Source: Ambito
