OPC 5 Budget Law 5 Public Social Spending in the 2020 Budget Bill

Public Social Spending in the 2020 Budget Bill

The projected Public Social Spending (PSS) for 2020 amounts to AR$3.9 trillion, which implies a contraction of 0.6% year-on-year in real terms with respect to what was estimated for 2019. But that itself implies an increase of 5.9 percentage points (p.p.) with respect to the average of the years 2015-2018 and 0.9 p.p. with respect to that projected for 2019.

PSS accounts for 12.3% of GDP estimated by the Budget Bill, 0.3 p.p. less than projected for 2019 and 1.5 p.p. less than recorded in 2018. The PSS projected for 2020 is equivalent to 62.5% of total spending and 77.4% of primary spending, levels almost equivalent to those projected for 2019.

Social Security represents 80% of GPS and its growing significance is because 90% of it is subject to the mobility index. This item marks the historic high since 1993. According to official macroeconomic assumptions, pensions will recover 1.7% in real terms, against a drop in the rest of benefits.

All social spending functions will register negative real indicators by 2020, except for Social Security, which will increase 0.5% YoY. The functions that fall the most are Housing and Urban Development, and Drinking Water and Sewerage, with real variations of 21.3% YoY and 16.0% YoY, respectively.

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