MercoPress. South Atlantic News Agency
Argentina posted a primary fiscal deficit of 3.9% of GDP during 2017
“At the beginning of the year many analysts thought we were not going to meet our goal, but working carefully we were able to do it,” Dujovne said. Argentina posted a primary fiscal deficit worth 3.9% of GDP in 2017, below its 4.2% goal and the 4.6% figure posted in 2016, Treasury Minister Nicolas Dujovne told reporters. He said the government’s 2018 target for a primary fiscal deficit remained at 3.2% of GDP, with targets of deficits worth 0.6% in the first quarter, 1.6% in the second quarter and 2.2% in the third quarter.
Since taking office in December 2015, business-friendly President Mauricio Macri has sought to reduce the wide fiscal deficit he inherited from former populist President Cristina Fernandez, whose two terms in office were marked by increases in subsidies and social spending.
“At the beginning of the year many analysts thought we were not going to meet our goal, but working carefully we were able to do it,” Dujovne said.
Spending rose 21.8% in 2017, below the 24.8% inflation rate. The administration’s has slashed spending on subsidies for utilities and transportation, helping lower the deficit but contributing to inflation, which ended the year well above the central bank’s target for 12-17%. Government revenue rose 22.6%, as an economic expansion boosted tax revenue.
Argentina’s 2018 budget bill had changed the estimated 2017 primary fiscal deficit, which does not include debt service payments, to 4.0%. In the month of December, Argentina posted a primary deficit of 119.607 billion Argentine pesos (US$6.35 billion), Dujovne said.
The total financial deficit rose 32% to 629.1 billion pesos (US$33.37 billion) for full-year 2017 on the back of a 71% increase in interest payments.
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Read all commentsI am confused! If 'good jobs' are being lost then which jobs are being created, since unemployment has been dropping from 9.2% in June 2017 to 8.7% in September and 8.3% in December 2017 (source: tradingeconomics.com)?
Jan 22nd, 2018 - 11:17 am +1Also, as Argentina has significant natural competitive advantage and significant spare capacity in agriculture, minerals and energy, surely it makes sense for any government to incentivise their development and to encourage foreign companies with expertise lacking domestically to invest in partnership with local companies? Argentina benefits from this through higher employment and through the ensuing taxes on profits and employment. Modern economies do not forbid profit repatriation; to the contrary, without it overseas investors are wary of investing, especially given Argentina's record. Argentina has the resources - encourage the world to bring expertise to the party and all will benefit!
Oh, the art of making bad news appear as good.
Jan 21st, 2018 - 06:09 am 0“Argentina posted a primary fiscal deficit worth 3.9% of GDP in 2017, below its 4.2% goal and the 4.6% figure posted in 2016.”
In reality, Macri's economic program is based on unsustainable, massive borrowing that happens because of the high interest rates Argentina is willing to pay--just to keep the lights on.
In the meantime, the domestic productive sector of the economy takes a death hit from wide-open imports, with companies closing down every month and good jobs being lost.
The only thriving sector is the agro export and mining, which have seen its export taxes slashed and are allowed to keep their profits abroad.
Capital flight is at an all-time high, and some economists close to Cambiemos are beginning to express their worries in public.
Like a reverse Robin Hood, Mauricio Macri has come to steal from the poor to give to the rich.
The goal? Go from a 50-50 income distribution to 70-30...and you know who the big losers are.
Many are those who gave their vote to Cambiemos.
Some of them are still holding their breath waiting for something good to happen.
The question is, how long they are willing to wait.
“Oh, the art of making bad news appear as good”
Jan 22nd, 2018 - 07:34 pm 0Reekie, Why are you so unhappy when good news comes out of Argentina? Why is a reducing fiscal deficit bad news exactly?
Fact: The Argentine economy is now both servicing the international debt AND reducing its fiscal deficit. The fact that it can afford to do both must be good news. The fact that it can do both indicates that the borrowing is not unsustainable as you claim because Argentina's growing economy can clearly currently afford to pay its debts and this situation will only get better as the debts reduce and the economy grows.
Tombar,
“I am confused! If 'good jobs' are being lost then which jobs are being created, since unemployment has been dropping from 9.2% in June 2017 to 8.7% in September and 8.3% in December 2017?”
You have to understand that many of Reekie's statements are not based on the sort of facts that you have presented. We don't know why he does this.
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