The July deficit was compatible with the annual goal of 2.5%

The July deficit was compatible with the annual goal of 2.5%

The Ministry of Economy released the figures for the fiscal deficit for the first months of the year.

The national public sector registered a primary deficit of $75,947.3 million during last July, compatible with the annual goal of 2.5%, the Ministry of Economy reported this Monday.

“July shows a series of corrections that allow us to resume a fiscal path compatible with an annual deficit of the National Public Sector of 2.5% of the Gross Domestic Product (GDP)”said the Palacio de Hacienda through a statement.

This number “considers the annual limit for the computation of income from property income linked to primary issues of public securities equivalent to 0.3% of GDP.”

Thus, in the first seven months of the year, a primary deficit result of $876,628.7 million is accumulated, equivalent to 1.1% of GDP.

“Without discounting the surplus consistent with the primary deficit target of 2.5% of GDP, the primary deficit for the month of July was $1,945.3 million,” the information added.

On the other hand, the payment of interest on the public debt, net of intra-public sector payments, was “$129,717.5 million, resulting in a financial deficit of $131,662.8 million”.

With these corrections, July presents a slowdown in the real growth of primary spending, due to the policy of organization and consolidation of public accounts.

The total income of the SPN (National Public Sector) amounted to $1.384 trillion in July, with an interannual increase of 82.8%.

The percentage increase becomes relevant if one takes into account that “it occurs on a high comparison basis of July 2021, a period in which $ 19,168.8 million were collected as the Solidarity and Extraordinary Contribution to help moderate the effects of the pandemic and $11,642.9 million were received in Special Drawing Rights (SDR) received from the IMF in the framework of the cancellation of Sudan’s debt,” said Economy.

Last month, tax revenues reached $1,214 billionwith an increase of 81.4% compared to July 2021.

For its part, the primary expenditure of the SPN reached $ 1,386 billion and presented a rise of 62%, which if the cost related to Covid is excluded would amount to 68.5%, in both cases lower than the evolution of total income.

Social security benefits reached $486,240.3 million (+71.9%), due to the impact of the mobility formula, while remuneration registered a variation of 87.4%.

Expenditure on goods and services registered an increase of $4,315.3 million (+10%), in part associated with the increase in activities related to the National Population and Housing Census, which was reduced by lower expenses for mitigation actions the Covid-19 pandemic compared to the same month of the previous year.

Current transfers reached $425,009.4 million (+34.5%) and those corresponding to the private sector had an increase of $83,954.4 million (+34.2%).

Regarding energy subsidies, transfers to Cammesa ($4,588 million) and to Energía Argentina, ex Ieasa ($74,588 million) increased mainly due to the increase in international hydrocarbon prices.

In line with the aforementioned objective, “Administrative Decision 826/2022 was issued today, which provides for compensation of budget credits, lowering them in various jurisdictions and increasing them in the Treasury by $210,000 million”.

The reductions include $ 70,000 million allocated to the Productive Management, SME Productivity and Competitiveness Promotion and Production Financing programs of the former Ministry of Productive Development.

In the same way, $10,000 million were subtracted from the Ministry of Transportation, covering improvement programs for the Roca Railway (La Plata Branch), the construction of the Ezeiza Airport Control Tower; and in comprehensive mobility and river transport policies.

The budget of the Ministry of Public Works was reduced by $ 50,000 million with subtractions in penitentiary, social, environmental and water resources infrastructure programs.

Finally, $50,000 million were subtracted from the Ministry of Territorial Development, $50,000 million from the Ministry of Education, in its infrastructure and equipment programs, building strengthening of kindergartens, and Connect Equality; and $10,000 million in the Program for the Prevention and Control of Communicable Diseases of the Ministry of Health.

Of the $210,000 million, $128,000 million will be used to pay obligations by the National Treasury, while the rest, $82,000 million, will be transferred by the Treasury to the item “Assistance in Economic Services”, which includes expenses in personnel and transfers to finance expenses of public sector companies.

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