Report shows surprisingly optimistic scenario for Argentina’s economy

BUENOS AIRES – Surprising positive news from Argentina´s economy, where news about the upcoming loan with the IMF dominate the headlines. The first annual balance shows Argentina’s economy has improved. Finance minister Nicolas Dujovne said that “for the first time since 2004 the growth of public sector resources supersedes the growth of public expense.”

Argentina’s treasury presented the 2017 economic balance as well as the agenda for the current year. Finance minister Nicolas Dujovne pointed out the details that defined the economic fluctuations during last year. He also remarked that the primary result, which is the difference between the spending and the input,was negative with $119 billion pesos last December 2017. Dujovne also said that primary expenses grew 6% annually, which is the lowest rate since 2004.

The fiscal goal predicted for 2017 contemplated a primary deficit of 4.2% of GDP, which is expected to fall to 3.2% in 2018, 2.2 % in 2019, and to 1.2 % in 2020. “The result obtained in 2017 has been a primary deficit of 3.9%, wherewith we have over-fulfilled the goal of 0.3% GDP growth,” the minister said. According to Clarin Dujovne pointed out: “When it comes to take measures of that magnitude, it is necessary to choose what costs have to be avoided and what costs must be paid. The cost we chose to avoid is having a crisis.” Equally important, Dujovne said that the reduction of the fiscal deficit was possible by cutting public works and expanding tax collection.

Another important aspect highlighted was that in April 2018 the primary fiscal deficit fell by half year-on-year down to 44.6%, according to the government. The national public sector had a primary deficit of around $10 billion pesos, a decrease of 44, 6 %,falling three consecutive months. Interest payment on public debt increased 9.1%, while the financial deficit was up to around $43 billion pesos.       

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