In the first quarter, public spending in Argentina grew almost 13 percentage points more than income, in real terms, according to a report by the Congressional Budget Office (OPC).
Subsidies and disbursements in pensions and salaries put pressure on compliance with the fiscal goal agreed with the IMF, although the Government repeats that it will be able to reduce the deficit to 2.5% of GDP.
Revenues accumulated in the first quarter a real growth (discounted inflation) of 2.6 percent. But total expenses (current and capital) climbed 15.2% in real terms.
The bulk of the expansion in outlays has to do with current expenses. Retirements and pensions, the most significant expense in absolute terms, grew 62.6% annually in the quarter, or 5.7% above inflation. Family allowances and AHU did so at 80% nominal, or 17.5% real.
The salaries of the national public administration increased 11.7% real. Social programs such as Empower Work, Progress and others are less significant in absolute values, but spending grew 21.9 points above inflation.
In four months, the expense for economic subsidies grew 50.3% real. Almost $420,000 million (3,576 million dollars) were allocated to energy payments, or 78.7% more than a year ago, discounting inflation. It weighed the import of LNG for 800 million dollars, in March. Transportation spending grew 13 points.
The expansion of spending comes with a “carryover effect”. The Government accelerated the parity and reinforced the social items towards the last quarter of 2021, after having kept the accounts practically balanced in the first half of that year.
“There was half a point of accumulated deficit towards April, of the 2.5 percentage points” of the goal set by the program agreed with the IMF, said Ricardo Delgado, president of Analytica. “There are two points left from May to December, it is a complex goal,” he warned.
The Government overachieved the fiscal goal set for the first quarter, with the help of the extraordinary jump in property income. It was “creative accounting,” according to consultants: the differences between the real and nominal valuation of public securities placed on the market were recorded as effective income. This caused a jump of 1000% per year in this account, in March, which allowed the goal to be met.