In May, the fiscal deficit was 191 billion dollars and now the goal with the IMF is at risk

Due to lower funding and higher spending, May’s public accounts showed a primary deficit of $ 191.528 million, the largest so far this year. The result contrasts with the surplus of $ 25,714 million recorded last year and excludes most of the real estate revenues that the government had calculated, given that in May they reached the annual limit of 0.3% allowed by the IMF.

If this limit had not been taken into account, the primary deficit would have been $ 162.412 million in May. This is the result reported by the Ministry of Economy in a statement published on Monday. Although within the official numbers it is indicated that the 191.528 million dollars correspond to the “primary result under the Extended Structures Program”, in reference to the current agreement with the Fund.

The primary deficit in the second quarter therefore remained at $ 463.4 billion. The goal with the IMF is $ 566.8 billion. It means that in June there would have to be a red of around 100,000 million dollars to reach that figure. The target will likely be recalibrated, which could be announced this Friday after the board of directors approving a new grant for the country.

Public sector funding was $ 1,128,630 million, an increase of 58.7% year-on-year. In this way it showed a significant slowdown compared to May, “due to the high base of comparison in May 2021, due to the collection of the Solidarity Contribution and Extraordinary Contribution”, explained Economia. Revenues were driven by Earnings, Personal Assets, Payables and Receivables, Contributions and Contributions to Social Security.

On the other hand, “for the purposes of the policy objectives contained in the economic program consistent with a primary deficit target of 2.5% of GDP, an annual limit has been set for the calculation of rental income from buildings linked to primary issues of government bonds equal to 0.3% of GDP. In this way, the primary deficit covered by this limit amounted to 191.528 million dollars in May, “said Economia.

In the months preceding the Treasury, the real estate rent was used to inflate deposits and moderate the fiscal imbalance. In April that income, linked to income received by the state from financial assets it holds in the form of term or government bonds, reached $ 134,799.7 million (1,041% yoy), while in May it fell to $ 84,000. million (113%). And if the cap is applied, the revenues go down even more.

Spending, meanwhile, was $ 1,291,042 million, up 88.3 percent year-on-year. From the Economy they recognized an “expansion of spending” due to the impact of the war in Ukraine on international food and energy prices, the measures taken by the government to strengthen the income of the most vulnerable sectors and the increase in social benefits for the adjustment of mobility.

The latter item grew 94.7% year on year, driven by the other social programs category, which includes transfers to the provinces, public companies and social subsidies. Energy subsidies grew 62.1%, less than half the growth recorded in April, but are expected to increase in June. Current transfers to the provinces increased by 131% and capital expenditures by 84.7%.

If you add $ 80,021 million in debt interest to the result, the financial deficit was $ 271,549 million. Thus, in the first five months, a primary deficit of $ 463,448 million (0.6% of GDP) and a financial deficit of $ 877,456 million (1.14% of GDP) accumulate. For June, the target agreed in March was for a primary red of up to $ 566.8 billion (0.73% of GDP), which is now under review.