The fiscal deficit increased 146% in October and reached $ 277,094 million. Thus, in the first ten months of the year the accumulated red in public accounts was $ 776,645 million, which equivalent to 1.8% of the Gross Product. For the last two months of 2021, in this way, the Government would have a margin of acceleration of spending greater than 2 points of GDP, since it foresaw to end the year with a deficit close to 4 percent.
According to the data released this Tuesday by the Ministry of Finance, revenues in October amounted to $ 771,447 million (69.8% year-on-year nominal improvement), explained by the collection of export duties, social security and economic activity, estimated from the Ministry of Economy.
Income associated with economic activity, such as VAT net of refunds ($ 43,776.1 million; 52.3%) and credits and debits or check tax ($ 27,550.2 million; 65.7%) exhibited higher growth of the price level, as well as the collection associated with the Income tax ($ 31,587.1 million; 67.0 percent). At the same time, the variation in export duties amounted to $ 50,308.4 million, which implied an improvement of 128.8 percent.
For the last two months of 2021, in this way, the Government would have a margin of acceleration of spending greater than 2 points of GDP, since it expected to end the year with a deficit close to 4 percent
Regarding expenses, the variation was 83.0% year-on-year and 96.9% if expenses associated with Covid are excluded from the account, both in 2020 and 2021. “This expansion of spending is driven both by capital investment and by the different social inclusion and containment measures deployed by the National Government throughout the current year,” considered the Ministry of Economy it’s a statement.
Subsidy outlays grew in nominal terms in October by 131.8%While operating expenses that include, for example, the payment of public sector salaries, had an increase of 114 percent. On the other hand, budgetary funding for social benefits (which includes pensions and social assistance programs) grew nominally 54%.
Regarding subsidies, the Government explained that part of this increase was due to the assistance of the Treasury to Cammesa, the company that manages the wholesale electricity market ($ 39,182 million) and the payments of the Hydrocarbon Policy Formulation and Execution program ($ 3,811 , 0 million) for higher expenditures under the Plan Gas program.
On the other hand, capital spending registered a rise of 50,644 million, which implied a rise of 264.2% year-on-year, so it tripled its value compared to the same period of the previous year. “The growth was mainly driven by higher capital transfers to the provinces ($ 21,202.3 million), among which those made to housing construction ($ 5,083.9 million), Educational Management ($ 3,000 million), Transportation ($ 2,470 million) and those carried out by Ente Nacional De Obras Hídricas De Saneamiento (Enohsa) for the development of sanitation infrastructure ($ 2,425.5 million)”, Compiled Economy.
Capital expenditure registered a rise of 50,644 million, which implied a rise of 264.2% year-on-year, for which it tripled its value compared to the same period of the previous year
“In the same sense, there is an increase in Real Direct Investment, in which the investment by public companies ($ 5,088.7 million) as well as the expenditures made by the National Highway Administration for the construction of highways stand out. ($ 1,706 million) and by the Ministry of Public Works for Infrastructure of Transportation Works ($ 1,290.0 million) ”, they mentioned from the Palacio de Hacienda.
The best primary fiscal result that the Government had in the first ten months of the year compared to 2020 of record public spending due to the context of the health crisis will allow the Executive Power to have a greater margin of maneuver until the end of the year. For comparison, in October 2020 the public sector accumulated a primary deficit close to 5 points of GDP, which contrasts with 1.8% of GDP in October of this year.
According to the estimate made by Martin Guzman In the 2022 Budget project, the primary deficit would end the year at around 4% of the Gross Product, so the Executive Power would have gained a margin of action with spending greater than 2.2 percentage points of GDP, which is equivalent to about $ 950,000 million.