The assertion by the Minister of Economy, Luis Caputo, that the Government has managed to carry out a titanic effort to reduce spending during 2024 without affecting the amounts for social security It is a half-truth, according to the official data available.
Strictly speaking, if we analyze the numbers of the National Public Administration (APN), at accrual level, In the first 11 months of the year, the Spending on social benefits fell 18.3% in real terms.
The explanation given by the ruling party is that the expenditures in The Universal Child Allowance (AUH) rose 35.1% in real terms so far this year, to total $1.61 billion.
But the Most of the commitments assumed by the national State in social matters have declining numbers. It is worth remembering that more than half of the Nation’s budget has its items tied to some benefit of this type.
Retirement spending: how much it fell in 11 months
If you analyze social cats more precisely, Retirements and Pensions show a drop of 17.1% in eleven months with a total of $30.5 billion.
The OPC explains that spending on retirements and pensions “falls as a consequence of the update below inflation, partially offset by the application of bonuses granted to retirees and pensioners with lower incomes.”
““The eleven-month average purchasing power registers a real drop of 21% compared to the same period in 2023,” notes the study. In that sense, the technical body of the Legislative Branch relativizes the ruling party’s assertion that this year retirees began to regain purchasing power.
On the one hand, it is stated that The minimum salaries, which include the $70,000 bonus that has been granted month after month since March, register a drop of 15.7%. From this, it must be taken into account that, due to the change in the imbalance formula, which includes the inflation of the previous month, Assets that are above the minimum began to recover ground by 12.4% in real terms compared to 2023 as of November. But the minimums lose $5.6% due to the effect of the freezing of the bonus, states the OPC.
Different analyzes indicate that, In December, perhaps, pension spending has stopped falling, but we must bear in mind that, at the end of the day, The Government chose to adjust those at the base of the pyramid.
With the previous formula they would have earned more
For example, the Center for Argentine Political Economy (CEPA) maintains that “the pension policy adopted, since December 2023, had different aspects, all of them regressive in nature.”
“First of all, it is worth highlighting the loss of purchasing power of assets. The Government took advantage of the temporary gap in the pension formula and modified the retirement formula before it incorporated the effect on salaries and collections,” says CEPA.
The report recalls that, “in March, the Government issued DNU 274/2024 in which it was established that the increases be monthly according to the latest inflation data available (from 2 previous months: for example, for April, inflation will be considered February) in addition of an exceptional increase of 12.5%, as a compensation for January inflation, which had been 20.6%”.
“Although the formula tied to the CPI allowed us to recover part of the ground lost in the first quarter (because in a scenario of declining inflation, the update is greater than the CPI of the month), The previous formula, over time, would have been superior for retirement benefits. The previous formula, tied to salaries and collection, would have yielded salaries 21% higher by December 2024 compared to what they actually will be with the Milel formula,” says the report from the center directed by economist Hernán Letcher.
Other social expenses.
The category Assets, Liabilities and others, shows a contraction of 20.5% with $2.5 trillion. On the other hand, expenditures on non-contributory pensions fell, so far, 11.8% to reach $3.36 trillion.
The great pruning goes through what is called Other Social Programswhich include Empower Work, Return to Work, Food Policies and Progresar Scholarships. There, the decrease was 45.63% to $1.2 billion accumulated in the year. The Potenciar and the Volver added together register a contraction of 59.3; las Food Policies, 18.1% and the Scholarships, 64%.
Source: Ambito
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