THE pension liquefaction of the first two months almost explains half of the total reduction in primary public spendingbefore interest is paid. The rest are transfers to the Provinces, PAMI and Universities, according to a report by the IARAF (Argentine Institute of Fiscal Analysis).
In the month of February, the primary expenditure incurred by the National Administration was 4,070,000 dollars. By discounting last month’s estimated inflation, Spending would have fallen by 36.4% in real terms compared to February 2023. This drop would be greater than those recorded in the last two months (23.2% and 30.1%).
He accrued expense register the commitment you make the public sector, for example, sending funds to a province. He expense paidfor its part, it records the amount actually sent to that province. If less money is paid or sent than is earned, a debt is generated, usually called floating debt This is what has been happening in recent months.
The Report adds that, with these figures, in the cumulative first two months Over the course of the year, primary spending decreased by 33.6% on an annual basis.
The items with the greatest real interannual decrease would have been: total transfers to provinces (-65%), Goods and services (-46%), benefits of National Institute of Social Services for pensioners and pensioners (INSSJP-PAMI)with -39.5%, University (-30.1%) and family allowances (-15.6%).
He the most important expense, that of pensions and pensions, would have come down 32.6% real on an annual basis, slightly lower than the real decline in average spending”.
From the analysis of accrued liabilities a very negative conclusion emerges, the Report recognizes: The reduction in pension spending would have been equivalent to 43% of the total reduction in real spending made in the first two months. In the case of salary expenses the reduction would have been equal to 5% of the total reduction.
“This reflects that the payment of pensions and salaries of the first two months explains half of the total reduction in primary spending carried out in the period. The flip side of that loss of purchasing power is a significant decline in real spending on pensions and, therefore, in total spending”, concludes the Report.
With the increase of 27.18% and the bonus up to $70,000, the Retirements and minimum wage pensions will collect a total of $204,445 gross during March, April and May. The total comes to $134,445 plus $70,000.
Consequently, with these values, you will have the minimum assets a 33% loss in purchasing power compared to March 2023. And for those who have not collected and will not collect the bonus, the loss rises to 44% in 12 months. The loss worsens in the months of April and May.
With these numbers, and compared to a year ago, the purchasing power of assets is as follows:
- In March 2023, The minimum asset was $58,665 plus a $15,000 bonus – a total of $73,665.
- In March of this year, The minimum asset will be $134,445 plus $70,000 bonus: total $204,445. This represents a year-over-year increase of 177.5%.
With inflation of 16% in February and 15% in March, interannual inflation would rise to 311%. The difference equates to a loss of purchasing power of 32.6%.
Source: Clarin
