The financial figure of the national public sector in the first 2024 was the best one in the last 64 years, with an adjustment by 5.6 points of the GDP, prompted by expenditure cutbacks, as revealed by a report by the IERAL Institute of the Mediterránea Foundation.
The analysis showed that “only taking into account the improvement in the financial figure of 1 percent of the GDP or above, there are eight cases in six decades and a half, headed by the aforementioned first half of 2024, followed by 1985, when the Austral Plan caused an improvement by 4.6 points of the GDP in the fiscal figure, and then the fiscal adjustments of 2003 (1.8 points of the GDP), 2002 (1.7), 1977 (1.7), 1967 (1.5), 1984 (1.4) and 1991 (1.0)”.
As for the motor which sustained this figure, unlike what happened in other periods, the entity led by the former head of the ANSES Social Security Administration, Osvaldo Giordano, held that “what makes the adjustment of the first semester more noteworthy is that the entire improvement in the financial figure must be attributed to a reduction in the public expenditure, while in 1985, when there was also a strong improvement, the entire contribution was by a rise in resources (+6.2 percent of the GDP), whilst the expenditure that year went up by 1.6 points of the GDP”.
Still in that line, it stressed that “in the eight years when significant improvements were experienced in the financial figure of the public sector between 1961 and 2024, only on 3 occasions did the adjustment in the expenditure contribute more than the rise in income, the first half of 2024 being the most outstanding case”.
By specifying the most significant cutbacks, the report specified that “in 2024, the adjustment by 5.4 points of the GDP in the expenditure is explained by the reduction in transfers (pensions, subsidies, transfers to provinces, etc.), by 3.7 points of the GDP, followed by the lower capital expenditure (1.4), and decrease in the expenditure in personnel (0.3)”.
The study specified that the fiscal figure of June led to a primary surplus of 0.08 percent of the GDP, and a financial surplus of 0.04 percent, with a first semester which culminated with a 1.2-percent surplus and a financial surplus of 0.4 percent of the GDP.
In this respect, from IERAL they explained that “this results from an annual reduction of the expenditure by 35 percent, since total income fell by 5 percent, in both cases in constant values”.
They further stated that the highest annual adjustments in the expenditure came from transfers to provinces (-98 percent in capital transfers and -74 percent in current transfers), public investment (-71 percent), economic subsidies (-43 percent) and pensions (-27%).
As for the way the cutbacks were distributed so far this year, they specified that “the adjustment in the primary expenditure was by 39 percent annually in January, to then slow down the fall until April, when the reduction was 24 percent annually”, whereas “starting in May the adjustment became quicker again, and the semester ended with a 35-percent drop in June”.
Thus, they revealed that “what has been slowing down the drop are the expenditure in personnel, pensions and capital expenses, which fell less in the last three months of the semester than earlier this year”, while “on the other hand, the adjustment was accelerated in the last two months by other operating expenses, transfers to universities and subsidies to energy and transport”.
--TIMES/NA
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