Guidelines for the preparation of the macroeconomic scenario

Guidelines for the preparation of the macroeconomic scenario

The purpose of this document is to outline the main methodological aspects and the technical tools used for the preparation of the macroeconomic scenario adopted by the OPC in the framework of the report “Revised Estimates – 2020 Budget Bill”.

The approaches included in this document are not intended to specify a closed macroeconomic model, to investigate the causal processes of the phenomena under study or to provide certainty for future budgetary outcomes. Rather, it seeks to contribute to the analysis of how the argentine economy and public budget will evolve if the current economic policy and the same conditions are to remain unchanged.

Macroeconomic variables play a fundamental role in the design of budgetary policy as they are closely linked to the revenues and spending estimates (and financing needs) included in the Budget Bill.

Making short, medium, and long-term projections of significant national macroeconomic variables allows, among other things, producing independent analyses of the impact of these variables on the public sector balance sheet, forecasting their future evolution for multi-year horizons, as well as conducting studies on the intertemporal sustainability of the national public debt.

Analysis of National Tax Revenue – May 2019

Analysis of National Tax Revenue – May 2019

In May, tax revenue grew 50.4% in nominal terms with respect to the same month of the previous year but declined 4.3% in real terms during the same period. This decline deepens to 6.5% when considering the first five months of the year.

Overall tax revenue has been declining in real terms for eleven consecutive months, although it began to reduce the rate of decline.

In this context, Income Tax exceeded the collection expectations for the month with an increase of 7.5% year-on-year in real terms. Together with taxes on foreign trade, it is one of the taxes whose growth exceeded inflation.

VAT contracted by 8.1% in May, although this record implies a deceleration of the falls of the last seven months.

The decline in Social Security resources deepened because of the deterioration of the labor market and the changes in the employer contributions system. However, in the fifth month of the year, Social Security resources might have found its lowest level, and in the following months the trend may consolidate.

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