OPC 5 Budget Execution 5 ANALYSIS OF NATIONAL GOVERNMENT BUDGET EXECUTION – JUNE 2020

ANALYSIS OF NATIONAL GOVERNMENT BUDGET EXECUTION – JUNE 2020

July 15, 2020
  • During the first half of the year, the national government recorded a primary deficit of AR$911.12 billion due to the increase in expenditures and the decrease in revenues, both conditioned by the health crisis.  his deficit was financed with profits from the Central Bank of Argentina.
  • In the first half of the year, primary expenditures increased 22.3% YoY in real terms. This variation is almost entirely explained by the fiscal measures adopted by the national government within the framework of the COVID-19 emergency and the social isolation measures. Meanwhile, given the year-on-year drop in debt interest (-38.7% YoY), the increase in total expenditures had a more moderate expansion of  0.9% YoY.
  • The programs implemented to face the health challenge implied an expenditure of around AR$449.73 billion, without which primary expenditure would have grown by 3.2% in real terms compared to the first half of the previous year.
  • Through twelve amendments, the initial Budget for the fiscal year increased by AR$845.41 billion, 67.6% of which was allocated to reinforce social benefits.
  • In June, pensions and retirement benefits fell in real terms for the first time in the semester (1.4%), but supplementary bonuses caused lower pensions to increase 11.7% above inflation.
  • The 71.8% drop in expenditure on housing and urban development was partly offset by the increase in expenditures on Potable Water and Sewerage, which rose 142.0% YoY, and on Financial Assistance for the Construction of Emergency Modular Hospitals, within the framework of COVID-19 ($4.38 billion).
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