2024-01-23 13:45:00
In 2023, the primary fiscal deficit reachedl 2.7% of the Gross Domestic Productthat is, it reflects a increase of 0.4 percentage points compared to that registered in 2022, according to the latest data provided by the Ministry of Economy.
Besides, the financial deficit (debt interest payment) fEU of 3.3%this is 1.4% more than what was recorded the previous year.
Thus, The consolidated deficit rose to 6%, against 4.2% in 2022, as explained in a report by the Argentine Institute of Fiscal Analysis (IARAF)
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In its analysis, the Institute that coordinates Nadine Argañaraz pointed out that the execution of expenses and income of the National Non-Financial Public Sector for the month of December indicates that the primary deficit increased by 27.3% in real terms compared to the same month of 2022. This was a consequence of the fact that lTotal national income fell 16.6% real year-on-year and the primary spending fell 6.2% interannual.
Throughout 2023, The accumulated primary deficit in 2023 was 2.7% of annual GDP, increasing 0.4 percentage points compared to 2.37% of GDP in 2022. The increase in the deficit of 0.4 percentage points of GDP arises from a decrease in primary spending of 0.6 percentage points of GDP and in income of 1 pp of GDP.
In addition, the analysis adds that, when considering debt interest spending, the fiscal deficit in 2023 had a value of 6% of GDP and an increase of 1.8% of GDP compared to the previous year. Interest expense increased substantially 1.4%. of GDP compared to 2022.
It is The increase in the imbalance of public accounts worsened in the second part of the year in the middle of the electoral campaign.
At that time, former minister Sergio Massa, committed to the IMF to comply with a fiscal deficit of 1.9% of GDP by 2023 in exchange for receiving US$7.5 billion.
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However, spending began to rise and reached a red mark 0.8 points higher than admitted.
In monetary terms it means an expense greater than income of the order of US$ 4,000 million.
The impact of drought
The deficit numbers were not only driven by the increase in public spending in what many described as the “small money plan”, but also last year the economy was subjected to the impact of the drought that caused a drop in government income. order of 1% of GDP.
It is worth noting that agroindustrial exports collapsed almost 35% in 2023. According to data from the Argentine Agroindustrial Council, they totaled just over US$35 billion last year.
In that context, Expenditures were reduced by 0.6%, although it was completely insufficient to balance public accounts..
From official information it appears that December was one of the worst months in terms of the management of public accounts.
He primary deficit was $2 trillion with a year-on-year increase of 351%, while the financial deficit reached $5.3 trillion, rising 1,270% compared to the same month of the previous year, after paying interest on debt for $3.3 billion.
Given the high amount of interest payments on public debt, the consulting firm Aurum pointed out that “It is likely that the payment of the DICP and TDF24 bonds has been included. In this way, the interest payment in 2023 would have increased due to the early cancellation of intra-public sector debt for $2.9 billion.”
LR
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