Due to the decline in real terms in pension and pension payments, family allowances, energy subsidies and capital expenditure, during the year 2023 The National Administration reduced primary expenditure by 7%, before interest is paid. And this made it possible to reduce the primary deficit by 0.3 points of GDP and the financial deficit by 0.4 points compared to 2022, despite the drop in income.
The decline in government spending was achieved largely due to higher inflation last year (211.4%), especially after the devaluation of August and December.
According to the Congressional Budget Office (CPO) Report – Analysis of the National Administration’s Budget Execution – it is noted that primary spending was reduced by 7% last year. In:
- Pensions and pensions (-6.1%)
- Family assignments (-31.1%)
- Energy subsidies (-26.5%)
- capital expenditure (-12.9%)
- Transfers for social programs (-3.9%).
The Report clarifies that “this behavior was determined by less assistance for Increase in income (-42.9%), as well as in the programs Improve your work (-9.3%) e Food policies (-12.3). In the opposite direction, the increase Progresar scholarships (+23.9%) and VAT refund, among other programs (+13.3%)
As a consequence of these falls, the Report adds “The purchasing power of pension benefits and family allowances has been reduced on average a 16.3% year-on-year, while the salaries of pensioners earning the minimum wage (with bonuses) increased by only 1.2% year-on-year.” And he adds: «The drop in spending would have been 12.4% on an annual basis if there had not been the extraordinary bonus policy, which partially offset the savings due to the application of pension mobility».
- Less financial aid to CAMMESA (-34.8%) and ENARSA (-2.3%), “in the framework of the tariff segmentation policy implemented during 2023 and a lower value of gas imports, for lower quantities and prices” .
- Spending on goods and services decreased by 10.9% due to lower purchases of anti-COVID-19 vaccines and those corresponding to those of the national vaccination calendar. Also due to the lower execution in 2023 of the 2022 national census of population, families and housing.
- Instead, spending on personnel is growing (+8.5%)THE current transfers to the provinces (+8.1%) and those destined universities (+6.2%).
On the revenue side, total resources decreased by 5.9% due to lower collection of export duties (-57.0%) and income tax (-21.5%), partially offset by higher revenue from PAIS tax (+118.0%) and VAT (+8.2%). ).
Tax revenues reached 9.4% of GDP, 1.0 point. Below 2022, “outside of tax collection, $308,651 million came from 5G licensing, which drove the increase in non-tax revenue (+61.2%),” the Report states.
Interest on the debt fell 5.8% compared to 2022. “The decrease primarily responds to lower interest on peso debt (due primarily to Treasury bills issued at a discount, partially offset by increased interest on CER-adjustable bonds), and higher interest on foreign currency debt due to loans from part of credit organizations, in a context of rising international interest rates and as a result of the higher coupons of the step-up bonds issued in the 2020 restructuring process.”
SN
Source: Clarin
