The fiscal deficit registered a significant improvement during 2021 and was almost 2 points below the peak of 6% reached at the end of the previous year. As reported on Monday by the Ministry of Economy and Finance (MEF), the red of public accounts closed in the 12 months to December at the equivalent of 4.1% of GDP. To find a deficit below that level, you have to go back to November 2018 (-3.8%). The Current Lacalle Pou executive took office with a deficit equivalent to 5% of GDP in March 2020.
In the last Rendering of Accounts of 2020, the government projected to close this year with a deficit of 4.9% of GDP. In other words, the data ended almost 1 point below what was projected by the MEF authorities. The Executive has the goal of bringing the red of public accounts to 2.5% of GDP by the end of 2024.
According to the official statement, in 2021 the result of the Central Government – Social Security Bank (GC-BPS) was -3.9% of GDP. The income of funds to the Social Security Trust Fund (FSS) —law for fifty-somethings— was 0.5% of GDP, so that the fiscal result of the GC-BPS adjusted for this effect was -4.4% of GDP. GDP.
The income of the GC-BPS closed the year at 27.2% of GDP, increasing 0.1% of GDP compared to 2020. The income of the DGI stood at 17.1% of GDP, increasing 0.6% of GDP in year-on-year comparison. For its part, BPS revenues fell 0.4% of GDP. This was mainly due to a drop in the income of FSS funds in terms of GDP.
The primary expenditures of the GC-BPS were located at 28.8% of GDP in 2021, decreasing 0.6% of GDP compared to 2020. The items of remunerations, liabilities and transfers decreased 1.1% of GDP as a whole (0 0.3%, 0.4% and 0.5% of GDP, respectively).
Non-personal expenses showed an increase of 0.6% of GDP, fundamentally associated with a higher cost of the measures implemented to deal with the covid-19 pandemic. On the other hand, investments showed a decrease of 0.1% of GDP. “It should be noted that the net effect associated with the Covid-19 Solidarity Fund was estimated at 1.7% of GDP for the year 2021,” he explained to the MEF.
Finally, the GC-BPS interest payment stood at 2.2% of GDP, decreasing 0.4% of GDP compared to 2020.
The impact of UTE exports
For his part, the global result of Public Companies (EEPP) closed at 0.6% in terms of GDP and showed an increase of 0.5% of GDP compared to the previous year. The current primary outcome of CSPEs improved 0.5% of GDP compared to 2020, which is mainly due to profits from UTE’s electricity exports.
In 2020 the deficit had closed at 6%.
Total EEPP investments remained stable in terms of GDP. The sum of the global result of the municipalities and the State Insurance Bank (BSE) improved 0.3% in terms of GDP compared to 2020. Therefore, the result of the Non-Monetary Public Sector (SPNM) stood at -2.7% of GDP. Excluding the effect of the FSS, the fiscal result of the SPNM stood at -3.1% of GDP.
The overall result of the BCU was -1% of GDP. While the current primary result was practically balanced in terms of GDP, the interest burden amounted to 0.9% of GDP. In sum, the result of the Global Public Sector (GSP) was -3.6% of GDP. Adjusted for the effect of the FSS, it stood at -4.1% of GDP.
