The fall in May tax collection complicated the government to close the month of the month, as can foresee from the budget execution of the National Public Administration (APN).
According to an analysis carried out by the Argentine Budget Association and Public Finance (ASAP) The total income of the APN experienced a decrease of 17% while the accrued expenses fell 8%.
The loss of income was due to the decrease of resources for the income tax, which in 2024 He had had extraordinary income due to the 2023 devaluation effect on assets.
On the other hand, there was also a Strong casualty of export withholdingswhich can also be awarded that the comparison floor of the year was higher, because at that time there were strong liquidations of the field and the BCRA bought reservations.
A third element that would come into play is that consumption still does not significantly raise what affects VAT collection. In addition, the Government stopped having the contribution of the country tax.
On the other hand, while in the first months of the year, the government had been showing increase in spending, Since April the “chainsaw” began to apply again. At least, from the point of view of accrued, according to Asap, in May the APN reduced 8%.
The data of the National Public Sector Base (SPN) will be released by the Treasury Palace next Wednesday 18 and could give a financial deficit
How the adjustment comes in 2025
It should be remembered that the Government in the 2025 budget sent to Congress and that it was not discussed due to lack of initiative of the ruling party I had set the rule that in case of falling resources, the expense had to decrease in the same proportion.
Recently, Some economists began to raise doubts about whether the adjustment that Javier Milei is making is sustainable. The reduction of spending is not the product of a reform of the public sector, but of the political will. It is not possible to cut expense every year, under the same configuration of the State, therefore, so that it is structural, a complete reform should be made.
In the first four -month, the government obtained a primary surplus equivalent to 0.6% of GDP, versus 0.7% in the same period of 2024. The Ieral, the Business School of the Mediterranean Foundation, indicated in a recent report that “If the trend continues, there should be no problems reaching the 1.6% primary surplus goal From GDP in 2025, versus 1.8% observed last year. ”
The Ieral points out that “The fiscal adjustment of the first four -month period of 2024 was explained by 36% due to the reduction in retirement spending; 11% due to the fall in national direct investment; 9% for lower energy subsidies; 8% for the adjustment in personnel spending; and about 7% due to the decrease in current and capital transfers to provinces. ”
As a counterpart, The report indicates that “the composition of the fiscal adjustment in the first months of 2025 shows a very different profile: 54% of the adjustment is explained by the decrease in energy subsidies; 37% due to the reduction of transfers to families (without AUH); and 8% for the decline in personnel erogations. “
Source: Ambito
