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ANALYSIS OF NATIONAL GOVERNMENT BUDGET EXECUTION – FEBRUARY 2024

by Nicolas Perez | Mar 7, 2024 | Budget Execution

Due to a decrease in expenditures (-23.8% YoY) and a slight increase in revenues (+0.4% YoY), in the first two months of the year, the National Government recorded a financial surplus 150.0% higher in real terms than in the same period of the previous year.

The primary surplus, which does not include interest payments, was 1,805.5% higher than that obtained a year earlier.
Total revenues grew 0.4% in the year-on-year comparison, driven by increases in the PAIS Tax (405.9% YoY), in Export Duties (70.9% YoY) and in VAT (15.4% YoY). These increases were partially offset by the decrease in resources from Social Security (-25.1% YoY) and Income Tax (-36.5% YoY).
Total National Government expenditures recorded a real fall of 23.8% YoY in the first two months of the year and the cut in primary expenditures, which does not include the increase in debt interest, rose to 33.6% YoY.
Pensions (-33.0% YoY real), energy subsidies (-59.5% YoY real), capital expenditures (-82.4% YoY real) and social programs (-29.9% YoY real) were the items that most contributed to the reduction in expenditures. However, debt interest grew 34.2% YoY.
In February, the financial result was in deficit (-ARS186.635 billion), although in the first two months of the year the surplus was maintained (ARS1,020.296 billion), with levels above the average of a 15-year cycle.
Total accrued expenditures represented 24.0% of the budget, which is an extension of the budget in force during 2023.

ANALYSIS OF NATIONAL GOVERNMENT BUDGET EXECUTION – FEBRUARY 2024

THE OPC PRESENTED THE LATEST BUDGET EXECUTION REPORT TO LEGISLATORS

by Nicolas Perez | Feb 16, 2024 | Activities

The Argentine Congressional Budget Office presented the latest published report on the Analysis of the National Government Budget Execution – January 2024 to national legislators and their advisors.

This is one of the periodic works conducted by the OPC with the purpose of monitoring revenues collected and expenditures accrued.

The presentation was given by the OPC Director, Gabriel Esterelles, together with the directors of Sustainability and Public Debt Analysis, Joel Vaisman; of Fiscal and Tax Analysis, Martín López Amorós; of Budget Analysis, Ignacio Lohle, and the analyst of this last directorate, María Laura Cafarelli.

The purpose of the online meeting was to provide members of the Chamber of Deputies and the Senate, as well as their assistants, with technical elements to improve the understanding of the monthly report disseminated through the OPC web page, offering, at the same time, the possibility of clarifying doubts about the methodology used and the results obtained.

The good reception of this new work modality was the basis for the decision to repeat it periodically to consolidate the technical dialogue between the OPC and the National Congress.

ANALYSIS OF BILL “BASES AND STARTING POINTS FOR THE FREEDOM OF ARGENTINES” – REPORT 1 – PENSION BENEFITS ADJUSTMENTS (SEC. 106)

by Nicolas Perez | Jan 13, 2024 | 25-PE-2023_ENG, Cost Estimates

Section 106 of the Bill suspends the mobility of quarterly adjustments for pension benefits and family allowances, subject to the evolution of salaries and ANSES (National Social Security Administration) resources and grants the Executive Branch the power to set the updates without defining a parameter to be used. This prevents a precise estimate of the fiscal impact but allows describing possible scenarios according to the criteria adopted by the Executive Power in the future.

If there were no increase during the year, pensions would suffer a 69.9% deterioration in their purchasing power, and social security benefits would fall from 6 to 4.5% of the GDP. Half of the beneficiaries would be indigent and 33% of them would be in poverty.
If there were adjustments only for the lowest income beneficiaries, the loss for those who receive three or more minimum pensions would be 69.9%. ANSES would have a surplus of 1.2% of GDP and social security benefits would represent 5% of GDP.
If all pension benefits were increased in the same proportion according to the evolution of ANSES funds, the average loss would be 19%. If this strategy were to include a priority for those with lower incomes, the loss for the rest would rise to 40%.
If all pension benefits were increased by inflation, there would be no loss of purchasing power and the ANSES deficit would rise to 0.8% of GDP.
From the application of the current adjustment formula (2021) until December 2023, minimum pensions that received full bonuses suffered a loss of purchasing power of 3.6% and the rest of 36.5%.
The decoupling between prices and pension benefits began in July 2022, when inflation accelerated.