Fiscals showed further deterioration in March due to the impact of the soybean dollar, drought and lower activity. The balance between receipts and expenditure showed a primary deficit of $257,856 million, an annual increase of 158.5% explained by the collapse of the collection related to agricultural exports, despite savings due to lower inflation-related spending.
In the first quarter, the accumulated red amounted to $689,000 million, failing to meet the fiscal target for the first time since the program began with the IMF. For the first quarter, the cap was $440 billion (0.3% of GDP). And in March, the reserve target was already exceeded, so the government is now negotiating a “rebalancing” of the deal with the agency.
On the other hand, payments interest on the debt totaled $130,000 million in February, 125% more than in 2022. If debt obligations are added to the primary result, in March there was a financial deficit of 388,000 million dollars.
Fiscal data has added further pressure to ease the commitment to reduce the primary deficit from 2.3% in 2022 to 1.9% in 2023. Economy Minister Sergio Massa advances on cuts in subsidies, increases in tariffs and restriction in the moratorium on pensions and social plans, but it would not be enough to compensate for the loss of income.
In March, funding was $1.5 trillion, a 77% annual increase, less than 104.3% inflation over the same period. The main impact is due to the 68% drop in export duties due to early December sales and drought. A collapse that was also reflected in a trade deficit of 1,000 million dollars and motivated a new soybean dollar.
Tax revenues linked to economic activity benefited from the 118% increase in VAT net of refunds and the 102% increase in personal income tax. Meanwhile, Social Security contributions have grown by 110%.
Primary spending, meanwhile, was $1.9 trillion, a 69% annual increase, well below inflation. Except for PAMI benefits and other social programs, all items experienced real declines as they rose in nominal terms relative to prices. This is the case of family allowances (30%), AUH (64%) and pensions (91%).
Economic subsidies, meanwhile, tumbled 35% in nominal terms due to a 48% drop in funds allocated to the energy sector.
“At the same time, capital expenditure grew by 146.2% year-on-year, maintaining sustained growth in investments linked to social policies and public investments linked to energy, housing and transport infrastructure works, including the gas pipeline Néstor Kirchner,” the Ministry of Economy reported.
Source: Clarin
