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The fiscal deficit reached $ 1 trillion in seven months, 4% of GDP

2020-08-21T02:49:08.417Z


In July there was a primary red (before the payment of interest on the debt) of $ 155,524 million. Spending grew 59.2% while income grew 16.1%.


Mary Church

08/20/2020 - 22:21

  • Clarín.com
  • Economy
  • Economy

With revenues that grew by 16.1% and public spending that did so at a rate of 59.2%, the primary fiscal deficit (before accounting for interest on the debt) reached $ 155,524 million in July , according to the Ministry of Economy .

This result compares with a surplus of $ 4.293 million in July of last year. The coronavirus pandemic resulted in a fall in tax revenues (due to lower economic activity) and also in the need to increase public spending to try to mitigate the negative impact of covid-19.

In turn, when the interest on the debt is calculated, which amounted to $ 33,566 million, the fiscal deficit reached $ 189,089 million last July.

So far this year, the primary deficit has accumulated $ 1.05 trillion, which when contrasted with the GDP shows that it is equivalent to 4% of the product , calculated Guido Lorenzo , director of the consulting firm LCG. In the first seven months of 2019, the fiscal result registered a surplus of 0.2% of GDP.

In July, primary spending amounted to $ 591,730 million, a growth of 59.2% compared to the same month in 2019. “The National Executive Power continues to implement measures to contain families, employment and production within the framework of the pandemic, in addition to offsetting the fall in revenue from provincial administrations, ”the official statement mentions.

The IFE bond and the ATP program (to contain the negative effects of the pandemic) continue to absorb the largest increases in spending. In fact, current transfers doubled. “The expenditures for the IFE and the ATP concentrated close to $ 72.3 billion. For its part, the Alimentar program and the allocations in the area of ​​Employment Support jointly accounted for $ 9.75 billion. With regard to health containment measures, additional expenditures from the Superintendency of Health and PAMI were financed for around $ 10,000 million ”, it was detailed. Transfers to the provinces increased 78.9%.

Subsidies also grew, "within the framework of the economic emergency and the containment of public service rates," it was explained. Those for energy increased 33.7%. "This dynamics was explained by greater financial assistance to CAMMESA, Yacyretá and IESA, which were partially offset by a decrease in expenditures from the Gas Plan," they added from Economy.

Social security benefits totaled $ 200,171 million, an interannual increase of 33.7% that arose from the decrees since the Mobility Law is "temporarily suspended."

On the income side, they reached $ 436,206 million, a variation of 16.1% compared to July of last year. In the Ministry in charge of Martín Guzmán they mentioned that "in monthly terms there was a growth of 8.3%, thus continuing with the gradual but sustained recomposition observed since May."

Tax revenues grew 31% year-on-year driven by increases in internal taxes, tax on debits and credits and export duties.

But property income fell 47.7% year-on-year "explained by the suspension of the payment of the installments of the loans granted by ANSES with the aim of mitigating the effects of the crisis on families."

Current transfers registered a drop of 79.9% year-on-year explained "by a greater comparison base, since in 2019 extraordinary resources were received due to the dissolution of the Argentine Hydrocarbons Fund for around $ 8,500 million", the document states official.

Regarding capital resources, a 25.1% year-on-year drop was observed due to fewer resources available from ANSES to finance the Historical Repair program.

"Lately the fiscal dynamics is surprising for the better. The fiscal gap is closing after the sharp jump evidenced during April and May," added Juan Ignacio Paolicchi , from EcoGo.

Source: clarin

All business articles on 2020-08-21

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