Due to the decline in funding, the deficit doubled in April and the goals with the IMF are complicated

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public accounts they deepened their deterioration in April launching a primary deficit of $331,000 million. The result implies an increase of 100% real. compared to last year and a bigger imbalance than last month, when red added $257,000 million, despite the reduction in real spending.

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If you include interest payments on the government debt (not counting intra-government payments), which reached $76 billion, the financial deficit was $407 billion in April.

In the first quarter, according to the Ministry of Economy, the primary deficit accumulated 1 trillion dollars (0.59% of GDP). The agreement with the IMF it had a ceiling of 440,000 million dollars (0.3% of GDP) for the first quarter, a limit that has already been crossed, and a limit of $1.2 trillion for June (0.72%). The reserve target was exceeded in March, so the government is negotiating a program review.

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On the funding side, the public sector totaled $1.8 trillion in April (71.9% over the past 12 months), an increase less than inflation’s 108.8% over the same period. Revenues were hit by a 33% drop in export duties.

“For the fourth consecutive month, there has been evidence of a negative impact on the collection associated with foreign trade taxes from the nation state due to the drought,” Economía said.

Between January and April, the authorities estimate a drop of about 580,000 million dollars compared to the projections on export duties of the 2023 Budget.

Contributions and social security contributions increased by 110.5%, VAT net of refunds by 115.2% and the tax on debts and credits and income tax recorded increases of 97.7% and 91 .7%.

In turn, primary spending reached $2.2 trillion (88.7%), below inflation in April. The real inter-year variation was therefore negative (-9.7%). Except for PAMI benefits, all social benefits lagged behind the price evolution: family allowances (28.7%), non-contributory pensions (86.9%), AUH (77.5%) and pension and pensions (91.3%).

At the same time, economic subsidies grew by $122,713 million (75.7%) due to the dynamics of energy subsidies (96.9%), which includes the upfront purchase of LNG. The latter had collapsed in March and should fall again in May due to the removal of subsidies promoted by the government.

Capital expenditures, on the other hand, increased by 99.4% due to energy infrastructure and housing works.

Fiscal data add more pressure on the government to relax its commitment to reduce the primary deficit from 2.3% in 2022 to 1.9% in 2023. access to the pension moratorium and social plans, but the decline spending is not enough to compensate for the loss of income.

The combined effect of the drought and December’s increase in soybean exports against the dollar hit the trade balance. In April it posted a deficit of 125 million dollars and in the first quarter it accumulated a deficit of 1,458 million dollars.

Source: Clarin

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