MercoPress. South Atlantic News Agency

Private sector says Argentina's budget must increase 19%

Casa Rosada - Buenos Aires

The Argentine government will have to increase in 19% its budget for 2008 and in 16% its income in order to balance public spending, as the estimations with which it was calculated “were surpassed” by inflation.

The new estimations were calculated by the Argentine Institute of Finance Executives (AIFE) in its monthly report, which says that the Government means will have to increase to 196.4 million pesos from 169.5 million. "The combination of higher incomes and higher spending that were foresight in the 2008 Budget was calculated using a forecast of inflation and growth that has been already surpassed. Therefore the budget has to be recalculated with an increase of 16% for the incomes, and of 19% for the spending", points out the report. The report shows that the estimations of the current year budget were exceeded in the first seven months by the spending as well as by the revenue. "The increase in public spending, higher than the one projected, has lead to an early draining of budget credit" the entity warns. The report states that tax receipts reached 24.518 million pesos in July, while in the first seven months it accumulated 151.161 millions, which shows an increase of 38.5%. According to Argentine Institute of Finance Executives, the national budget calculated tax receipts for 118.800 million pesos. Instead, revenue has reached 141.500 million. As regards Social Security, there should be a recalculation from 40.2 to 42.4 thousand million pesos, while in others, as in the Central Bank revenue, it should go from 10.5 to 12.5 thousand million pesos. On spending, there should be a recalculation of the budget with a 19.3% increase in order to go from 143.700 million to 171.100 million. In the area of subsidies, the government should calculate a 29.5% increase, from 48.900 to 63.300 million pesos. After recalculation, the primary surplus would be 3.1% lower, as it would go from 26.1to 25.3 thousand million pesos. On the other hand, there would be a steep fall of 28.6% of the financial positive result forecast in the budget, as it would drop from 7,000 to 5,000 million pesos. In related news, President Cristina Fernández de Kirchner announced Tuesday that July's primary public surplus was of 4,022.1 million pesos, and that the annual surplus represents 3.3% of GDP. Mrs. Kirchner also pointed out that it's 56.3% higher than the one registered in July 2007. At the same time, the President said that the commercial surplus in July reached 1.001 million pesos. (BAH).-