The Ministry of Economy reported this followingnoon that, in April, a primary deficit of $79,185 million was recorded while in the first quarter it rose to $271,920 million, mainly driven by the increase in investment in social assistance and the rise in energy subsidies.
Through a statement, the Treasury Palace indicated that in the fourth month of the year, the total income of the National Public Sector (SPN) amounted to $1,085,582 million, which implied an increase of 77.9% year-on-year.
In that period, tax revenue grew 60.3% compared to a year ago, mainly driven by the increase in revenue associated with Social Security, which registered an increase of 71.1% year-on-year, Earnings (90.6% year-on-year) , VAT (68.3% yoy) and Debits and Credits (65.0% yoy).
While, Primary spending in April registered a rise of 87.4% in April compared to a year ago, which amounts to 92.8% if Covid spending in 2021 and 2022 is excluded.
As of the first quarter of the year, a primary deficit of $271,920 million and a financial deficit of 605,906 million pesos accumulate.
“This increase includes capital investment (+85.7% yoy) in combination with social inclusion and containment measures (126.4% yoy), in addition to the rise in energy subsidies, by $96,834 million (148.4% yoy). ia) as a result of the increase in international hydrocarbon prices due to the war between Russia and Ukraine”, highlighted the Economy portfolio.
Thus, in the first four months of the year, a primary deficit of $271,920 million and a financial deficit of $605,906 million accumulate.
This dynamic is due to the fact that in April there was a real increase in total income of 12.6% real year-on-year while an expansionary fiscal policy was maintained – it grew 18.6% real year-on-year.
In this context, the portfolio led by Martín Guzmán highlighted that property rents reached $134,799.7 million, which implied an increase of $122,990.8 million. He added that of the total of these rents, $102,833.4 million correspond to property rents related to primary emissions, which total $222,065.4 million in the first four months of the year.
For the purposes of the policy objectives contained in the economic program consistent with a primary deficit target of 2.5% of GDP, the Ministry of Finance indicated that an annual limit will be established for the calculation of income from property linked to primary issues of public securities equivalent to 0.3% of GDP, “which represents an income/GDP ratio of magnitude equivalent to that registered for the same concept during the fiscal period 2021″.
“In this way, starting in May, the primary result that includes this limit will be added to the usual communication of income and expenses of the national public sector.”, they pointed out.
Social security benefits amounted to $416,073.8 million (+65.2% yoy). “This dynamic is explained by the impact of the current mobility formula, which shows increases as the economy grows and collection and wages recover,” they explained at the Ministry of Economy
It is worth remembering that andhe Central Bank (BCRA) turned on the “little machine” once more to print pesos and assist the Treasury to cover the deficit. For the third time in May, the entity chaired by Miguel Pesce transferred funds to the Government, this time regarding COP 87,615 million in concept of Temporary Advanceslast Friday the 13th.
So far in 2022, BCRA assistance to the Treasury amounts to $376,115 millionequivalent to regarding USD 3,200 million at the official exchange rate or 0.7% of GDP, when the goal for the second quarter is not expected to exceed $438,500 million, which limits the margin that the Government has to receive money from the issuing entity for 58,000 million pesos.
Meanwhile, from the Palacio de Hacienda they indicated that the National Public Sector registered a primary deficit of $79,184.8 million in April. “The payment of interest on the public debt, net of intra-public sector payments, was $67,129.8 million, resulting in a financial deficit of $146,314.6 million,” they detailed.
In the disaggregated analysis, they indicated that the total Income of the National Public Sector amounted to $1,085,581.8 million, which represents an increase of 77.9% year-on-year. While tax revenues grew to $903,592 million (+60.3% yoy), driven mainly by the dynamics of taxes related to Social Security and economic activity.
Likewise, the Ministry of Economy affirmed in the statement that the Contributions and Contributions to Social Security showed an increase of $123,959.7 million (+71.1% yoy) as a result of the increase in the average salary following the various joint agreements and the recovery of registered employment. It indicated that taxes such as Income grew $43,646.6 million or 90.6% year-on-year, VAT net of refunds (+$77,900.5 million; +68.3% yoy) and Debits and Credits (+$36,479.6 million; +65.0 % yoy) contributed to the growth of tax revenues.
Foreign trade taxes show a growth of +24.2% yoy, where Import Duties registered an increase of +59.4% yoy, driven by the growth of economic activity, while Export Duties increased at +14.0% yoy, affected by the advancement of the registration of operations between February and March, and by the stoppage of cargo transport and the union conflict in the ports that affected the normal activity of the agricultural export sector.
Taxes such as Income (growth $43,646.6 million or 90.6% year-on-year, VAT net of refunds (+$77,900.5 million; +68.3% yoy) and Debits and Credits (+$36,479.6 million; +65.0% ia) contributed to the growth of tax revenues.
In another order, the Palacio de Hacienda reported that current transfers reached $447,590.0 million (+124.4% yoy).
“Those corresponding to the private sector presented a growth of +$194,539.1 million (+126.5% yoy). The increase in the Empower Work program stands out (+$33,229.6 million) as a result of the inclusion of new beneficiaries and the increase in the Minimum Vital and Mobile Salary (SMVyM), which reached $38,940 in the month of April; the growth of Food Policies (+$8,800.0 million) as a result of the initiative of the National Government to expand the universe of beneficiaries up to 14 years, inclusive, in the month of May 2021″, he indicated.
As well as “the extraordinary increase granted to retired people and/or pensioners, and the increase in the payment of Family Allowances (+$25,434.0 million), which contemplates the granting of the monthly supplement”.
At the same time, Economy reported that increases were observed in transfers destined for programs ACCOMPANY with an increase of $3,118.9 million, Progresar (+$3,024.5 million), Medical Care for beneficiaries of ANDIS Non-Contributory Pensions (+$2,868.5) and Assistance to Health Insurance Agents (+$2,848.8 million).
In energy subsidies, transfers to Cammesa (+$53,784.1 million) increased mainly as a result of the increase in international prices of hydrocarbons due to the war between Russia and Ukraine.
By last, social security benefits amounted to $416,073.8 million (+65.2% yoy). “This dynamic is explained by the impact of the current mobility formula, which shows increases as the economy grows and revenue and wages recover,” explained.
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