OPC 5 Budget Execution 5 ANALYSIS OF NATIONAL GOVERNMENT BUDGET EXECUTION – YEAR 2021

ANALYSIS OF NATIONAL GOVERNMENT BUDGET EXECUTION – YEAR 2021

January 31, 2022

Including the Special Drawing Rights received from the IMF and the collection of the Solidarity Contribution, during 2021 the National Government revenues grew by 21.2% in real terms year-on-year, much higher than the increase in primary expenditure, which grew by 5.6% with uneven behavior by item.

This dynamic between revenues and expenditures implied an improvement in the primary balance for 2021, which went from a deficit of 7.3% of GDP in 2020 to a deficit of 4.6% in 2021.

  • All results were negative, but the deficits were lower than those recorded in 2020.
  • If SDRs and Solidarity Contribution resources were discounted, total revenues would have shown an increase of 11.4% YoY.
  • Tax revenues totaled ARS4.781 trillion, an increase of 20.7% YoY. Export Duties grew 67.1% YoY because of a combination of the improvement in the exchange rate and the increase in quantities and prices of products of the soybean complex.
  • Pension benefits fell by 4.3% in real terms during the year because of the mobility formula in force. This item records four consecutive years of decline, because pension benefits do not offset inflation. The share of social security expenditure fell from 9.8% of GDP in 2017 to 8.4% in 2021.
  • On the contrary, transfers for social programs (15.9% of total social benefits) showed a significant rise in the last two years and their share increased from 0.6% of GDP in 2019 to 1.8% in 2021.
  • Economic subsidies increased by 30.1% YoY in real terms, a percentage that doubles for energy subsidies and has even steeper rises for subsidies to the gas sub-sector.
  • The current appropriation increased by 31.0% with respect to the initial appropriation for fiscal year 2021 (ARS2,605.412 billion), mainly driven by the increase in social benefits.
  • As of December 31, 19 budget amendments were approved, which increased the deficit by ARS938.004 billion.
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