OPC 5 Budget Execution 5 ANALYSIS OF NATIONAL GOVERNMENT BUDGET EXECUTION- SEPTEMBER 2021

ANALYSIS OF NATIONAL GOVERNMENT BUDGET EXECUTION- SEPTEMBER 2021

October 15, 2021

Between January and September, the National Government reduced its primary (68.8%), fiscal (57.3%) and revenue (74.7%) deficits in real terms as compared to the same term of the previous year.

During the first nine months of the year, the revenues of the National Government grew 25.4% in real terms, basically because of a better VAT collection and the ARS427.401 billion coming from the allocation of Special Drawing Rights (SDR) that Argentina received in accordance with its quota of participation in the IMF.

Primary expenditure fell 3.2% but with an uneven behavior per item.

  • Pensions decreased in real terms by 7.4% because of the application of the mobility formula to which the ANSES schemes are subject.
  • Social programs showed a decrease in real terms of 45% because of the discontinuation of IFE (Emergency Family Income) and ATP (Employment and Production Assistance Program), which was partially offset by the budgetary reinforcement in other initiatives such as Potenciar Trabajo, Food Policies, PROGRESAR grants and REPRO.
  • Energy subsidies and capital expenditures lead the expansion of expenditures, with increases of 56.9% and 71.9%, respectively.
  • The increase in tax and Social Security revenues is partly determined by the low annual comparison base since the previous year’s economic activity was depressed by the Mandatory Preventive Social Isolation.
  • Interest payments on debt fell 25%, resulting from the restructuring of obligations in foreign currency, partially offset by an increase in payments to multilateral organizations.
  • Public investment in Housing and Urban Development increased 280% on average, boosted by the Pro.Cre.Ar program and the Social Housing Trust Fund.
  • There was a drop of 24.9% YoY in property income, basically caused by lower interest from the Sustainability Guarantee Fund (FGS).
  • The initial budget for this fiscal year increased by ARS1.152 trillion, with social programs (ARS342.160 billion), energy subsidies (ARS209.061 billion) and public investment (ARS104.847 billion) as priorities.
  • As of September 30, total expenditures accrued ARS6.991 trillion, equivalent to 73.2% of the current budget appropriation, a higher level than that recorded in 2020, when it reached 66.0%.
  • The execution of energy subsidies reached 88.4% and the items financed with the Solidarity and Extraordinary Contribution, 70.9%.
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