Despite the lower collection, the Government achieved a financial surplus in September with a strong adjustment in spending

In September, the Government managed to obtain a fiscal surplus for the ninth consecutive month. Despite the drop in revenue, the sustained adjustment in spending allowed the public sector to register a primary result of $816,447 million and a financial surplus of $466,631 million after the payment of interest for $ 349,816 million, discounting payments to State agencies.

In that way, The Executive paid the debt interest and obtained an additional surplus fulfilling its objective of prioritizing commitments with creditors and maintaining zero deficit. “The financial surplus achieved last month contrasts with the deficit recorded in September 2023, which at current prices was equivalent to almost $1,600,000 million,” said the Ministry of Economy.

The head of the portfolio, Luis Caputo, ratified this Wednesday the adjustment to maintain the fiscal surplus. “From bad politics they are wanting to break the fiscal balance because they have realized that it is the anchor of the macro order,” he shot.

On the income side, the public sector added $9.1 trillion in September, which implied a real drop of 8% year-on-year. Collection was affected by the decline in taxes linked to economic activity internal such as the Tax on Debits and Credits (-11% real year-on-year), VAT net of refunds (-17%) and Profits (-14%).

The income that rose above inflation was Contributions and Contributions to Social Security (+3% real year-on-year), Export Rights (55%), and Personal Assets (+273%), mainly explained by the special regime of income from Personal Property Tax (REIBP).

Regarding primary spending, the national public sector allocated $8.2 billion, which meant a real year-on-year decrease of 25% and reflected the continuity of the adjustment on the bulk of the items.

“In September, it can be seen that 14 of the 16 spending components had decreases in real terms. Those that rose were universal allocations for social protection (32.2%) and subsidies for other functions (3.4%). The expenses that fell the most were capital transfers to provinces (-97.5%), other current expenses (-78%) and current transfers to provinces (-71.5%),” said Nadín Argañaraz, director of the IARAF.

Regarding social benefits, Most items fell, such as social programs (-23.3%), family allowances (-18.1%), retirements and contributory pensions (-11.4%)non-contributory pensions (-8.3%) and PAMI benefits (-2%), according to IARAF calculations.

On the other hand, there was a real year-on-year decline in real direct investment (-65.2%), transport subsidies (-29.1%), public sector salaries (-20.5%), transfers to universities (- 19.7%) and, to a lesser extent, energy subsidies (6.6%).

Thus, in the first 9 months of the year, the public sector accumulated a primary surplus of $9.5 trillion (1.7%) of GDP and a financial surplus of $2.4 trillion (0.4%) of GDP. GDP. The fiscal goal for September with the Fund was a primary surplus of $7.6 billion. “Since 2010, a financial surplus has not accumulated in the first 9 months of the year“said Economy.

According to the IARAF, during the first 9 months, total income fell by 6.3% real year-on-year, while primary spending fell by 29.5% real year-on-year. “The fiscal adjustment so far this year is equivalent to 3 percentage points of GDP“said the institute.

In that period, cash-based national public spending fell $29.5 billion in constant September pesos compared to 2023.

“Of those expenses that fell, it can be seen that retirements and pensions supported 25% of the total reduction (their participation decreased 1 pp compared to the previous month)real direct investment 15%, transfers to provinces 16%, energy subsidies 11% and salaries and social programs 8%, among the most important,” concluded Argañaraz.