The CFA is an autonomous body made up of specialist economists Aldo Lema, Alfonso Capurro and Ana Fostelwhich hold periodic meetings at the MEF with the aim of ensuring the transparency of fiscal policies.
“On the side of the structural incomethere is no improvement in potential growth consistent with a greater rate of permanent fiscal expansion”, explained the entity, which considered that, given the current context, “any fiscal impulse, regardless of its destination and magnitude, will have direct impacts on the position structural tax if it is not offset by structural savings in expenditure items”.
According to the CFA, in a framework of stable growth, this will mean a less margin of reaction in the face of eventual external shocksshould it occur in the future.
In turn, he noted that the risks occur based on “the dynamics of some items of GC-BPS spending in 2022, in relation to what is projected in the Accountability of the 2021 financial year.”
What did the CFA say about the rest of the fiscal indicators?
The Council assessed compliance with the fiscal rule for the third consecutive year in its three pillars as “positive”, as reported by the Minister of Economy and Finance, Azucena Arbeleche in recent days.
This “consolidates a scenario of successive improvements in the fiscal position since the conformation of the current institutional framework,” according to the document of the independent body.
The CFA highlighted that the effective fiscal result registered a deficit of 3% of the estimated GDP (Gross Domestic Product), according to figures released by the MEF, which implies a reduction of 0.8% compared to 2021.
“The structural fiscal result of the GC-BPS reflected a deficit that was less than effective, standing at 2.4% of GDP. The structural deficit was 0.6 percentage points lower than the actual one because the latter continued to be impacted by the cyclical position of the economy (negatively affected revenues and positively affected expenses), as well as some extraordinary factors such as the COVID-19 Fund. 19,” the report noted.
Source: Ambito
