Argentina’s 2018 budget bill forecasts economic growth of 3.5% next year and average annual inflation of 15.7%, Treasury Minister Nicolas Dujovne told Congress. The bill proposes a 2018 primary fiscal deficit of 3.2% of gross domestic product (GDP) as previously announced.
But it lowered the expected 2017 deficit to 4% from 4.2% previously.
“We will continue to reduce spending on the national public administration,” Treasury Minister Nicolas Dujovne said in presenting the bill to lawmakers.
The average exchange rate for 2018 is seen at 19.3 pesos per US dollar.
The Mauricio Macri government also revised its 2017 average expected exchange rate to 16.7 pesos per dollar, down from the 17.92 included in the 2017 budget.
The budget foresees a financial fiscal deficit, including interest payments, of 5.5% of GDP, down from 6.2% in 2017.
The 2018 trade deficit is seen at 284.1bn pesos (US$14.7bn at the expected average 2018 exchange rate), due to a 6.8% increase in imports and a 5.6% increase in exports.
The average inflation expected in the 2018 budget marks a drop from the 24.5% expected in 2017, according to the bill.
The central bank is targeting year-end inflation between 12% and 17% this year and between 8% and 12% next year.
The budget includes a reduction in economic subsidies, including to energy and transport, worth 0.6% of GDP.
That will bring total spending on subsidies to 1.6% of GDP, down from 2.3% in 2017.
Capital spending, including infrastructure investments, will rise by 21.5% in nominal terms to remain at 1.9% of GDP.