Despite an intense day of crisis and Kirchnerite fire in the wake of the government’s PASO primary defeat last weekend, Economy Minister Martín Guzmán managed to meet the statutory September 15 deadline for the 2022 Budget, submitting it to Congress at the stroke of midnight with the signature of President Alberto Fernández.
The same Wednesday evening, Guzmán received a telephone call from Vice-President Cristina Fernández de Kirchner denying that she sought his removal, easing the pressure for his resignation somewhat yet failing to settle the issue.
The 2022 Budget forecasts an annual inflation of 33 percent for next year, a primary fiscal deficit of 3.3 percent of Gross Domestic Product, an official exchange rate of 131.10 pesos per dollar by the end of next year, a growth rate of four percent (following a rebound of eight percent this year) and energy subsidies to the tune of 1.5 percent of GDP to be achieved via segmented public service billing (otherwise they would be 1.8 percent), according to government sources.
As announced previously by President Fernández, the 2022 Budget assumes that no capital repayments will be made to the International Monetary Fund (IMF), since it is hoped that an agreement will be reached in the course of the year. Otherwise the government stands to pay US$19.1 billion.
The Economy Ministry forecasts that the wages of registered workers will grow 38.3 percent, ahead of inflation, after purchasing-power has fallen every year since 2018.
Private consumption will grow 4.6 percent and investment 3.1 percent, according to the bill. Exports will rise 7.5 percent and imports 9.4 percent. Government revenues are forecast to surge 45.3 percent to 15.7 trillion pesos from the 10.7 trillion pesos expected this year.
Economy Ministry sources told the Noticias Argentinas news agency that this Budget represents a recovery from the “double crisis” of “unsustainable debt” and the coronavirus pandemic.
The debt could only be paid by eliminating public works, subsidies and vaccine purchases as well as by cuts in education and health spending, the sources added.
The deficit would be financed by issuing public bonds to the tune of 1.2 trillion pesos (two percent of GDP), printing 1.08 trillion pesos (1.8 percent of GDP) and funds from public bodies (1.1 percent of GDP).
Guzmán’s next priority was a package of measures to assist low-income sectors in reaction to last Sunday’s electoral defeat, which was to have been announced on Thursday, but any announcement was delayed by the midweek Cabinet crisis.