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Milei announced a fiscal surplus of 0.2% in the first quarter of the year: “This economic miracle responds to the chainsaw” - Infobae
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Milei anunció un superávit fiscal del 0,2% en el primer trimestre del año: “Este milagro económico responde a la motosierra”
En cadena nacional, el Presidente defendió su programa económico. Destacó la acumulación de reservas en el Banco Central y afirmó: “El déficit cero no es una consigna de marketing para este Gobierno, es un mandamiento”
www.infobae.com
April 23, 2024
On national television, the President defended his economic program. He highlighted the accumulation of reserves in the Central Bank and stated: “Zero deficit is not a marketing slogan for this Government, it is a commandment”
Cadena nacional del Presidente Javier Milei
Cadena nacional del Presidente Javier Milei
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National channel of President Javier Milei
President Javier Milei defended his government's economic policy, just over four months into his administration, and announced on national television that the Government ended the first quarter with a fiscal surplus of 0.2% of GDP , which met with a margin the goal set with the International Monetary Fund.
In a brief message, which was recorded this afternoon in the White Room of the Government House and in which he was escorted by the Minister of Economy Luis Caputo , the president of the Central Bank Santiago Bausili and his vice Vladimir Werning , plus the secretary of Finance Pablo Quirno , the head of state, stated that the fiscal system is one of the columns that support his economic program.
“I understand that the situation we are experiencing is difficult, we have already gone halfway. This time the effort will be worth it,” the president began his speech. And he announced that he would announce something “that seemed impossible months ago .” And he added: “Contrary to the forecasts of the majority of political leaders, professional economists, television economists and tribune firecrackers, I want to announce that the national public sector registered a financial surplus of more than 275 billion pesos. It is 0.2% of GDP. It is the first since 2008. It is neither more nor less than the only starting point to end the inflationary hell. It is simply a world-class feat.”
“This economic miracle of achieving a quarterly financial surplus after almost 20 years, having received the inheritance we received, responds to what those who want the failure of this government usually say, to an enormous extent to what we called a chainsaw during the campaign. ", and not as some say to the liquefaction of public spending, a method that has historically been used in our country," he stated.
The President read his speech in a recorded message
“We are making the impossible possible, with the majority of politics, unions, journalists and economic actors against it. Inflation is plummeting and is lower than expected every month. The requirement is to guarantee a solid and stable economic order. So that Argentines can associate, trade freely and carry out their life project. Free prices and clear signals to be able to plan and invest. That is the task of the state, to generate the basic conditions,” continued the head of state.
He mentioned that for those who expect the Government to increase spending at some point, “that will never happen in our Government.” “ Inflation is theft. Zero deficit is a commandment. This means that each peso will be returned through tax reductions. “Savings and tax reduction until we have a level of spending in line with that of a country that needs to grow,” he postulated.
“ Do not wait for the exit hand in hand with public spending .” We will never go back to that again. The way out is through the private sector and credit financed with savings. A state that safeguards the life, liberty and property of individuals,” Milei mentioned.
Thus, the Executive Branch exceeded the goal set with the International Monetary Fund while the Government still aims to achieve a new agreement with the organization. Fiscal balance was achieved by a combination of cuts in budget items (public works, transfers to provinces) or liquefaction of others in comparison to inflation (public salaries or pensions). A positive fiscal result accumulated at the end of March had not been recorded since 2008, according to the head of state.
The adjustment numbers behind the fiscal surplus
As published by the Ministry of Economy after the presidential speech, in March the primary surplus was $625,034 million and, when adding the payment of debt interest, it had a financial surplus of $276,638 million .“The national public sector recorded three consecutive months of financial surplus for the first time since 2008, accumulating a surplus after interest equivalent to approximately 0.2% of GDP in the first quarter of 2024 (primary surplus of approximately 0.6% of GDP). GDP ). In this way, fiscal prudence continues to be consolidated, even exceeding the fiscal goal agreed with the IMF in the Extended Facilities Agreement for the first quarter,” stated the Treasury Palace.
“During the first quarter of the year, total income fell by 4.5% in real terms, while primary spending fell by 35% in real terms year-on-year . It should be noted that this real variation in primary spending turned out to be the largest real interannual variation in the last 30 years for a quarter, as can be seen in Chart 1. As a result, the primary surplus amounts to $3,868,000 million , which would be equivalent to 0.6% of GDP. The fiscal surplus amounts to $1,133,000 million , which would be equivalent to 0.2% of GDP,” estimated the economist of the Argentine Institute of Fiscal Analysis (Iaraf) Nadin Argañaraz .
Advance official data for the first quarter to which Infobae had access on the fiscal result of the Treasury – the data published by the Ministry of Finance and that will be announced by the head of State also involves other areas of the national public administration – already showed that the items Of the expenditure that had the most marked adjustments were capital expenditures ( public works ) which in nominal terms fell 68 percent .
Others, for their part, rose but well below inflation , such as Transfers to the private sector -typically subsidies- which rose 98% , universities (180% ), transfers to provinces (only 2.7% ) and public salaries ( 195 percent ). Only the Treasury, which is one of the components of the national public sector - which is what the Ministry of Economy measures to calculate its fiscal result - ended the first quarter with 1.9 trillion pesos of primary surplus , although a financial deficit of 967,000 million pesos by adding to the account the payment of debt interest, which in the first quarter was 2.9 trillion pesos .
The surplus result that Milei announced has different figures since this final accounting includes, in addition to the Treasury, decentralized organizations, Social Security institutes (Anses), PAMI and trust funds , among other areas of public administration.
