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The Treasury will publish a primary surplus during January

The dynamics have no chance of finding continuity in time, but everything indicates that on Monday the Secretary of the Treasury, Raul rigo, may present and celebrate a month of primary surplus. Unusual for what has been observed, with a 2020 of pure deficits. And especially for what is expected in 2021, with a primary red around 4.5%. However, the improvement in tax collection, and the clipping in the pandemic spending and the social benefits, they will leave positive numbers for January. The Government thus saved a month of monetary issue to supply the treasure.

The key was the Export rights, a tax that is not coparticipable and that, therefore, allows each peso entered to remain in the treasury, unlike what happens with the VAT Y Profits, the two that collect the most and are widely shared with the provinces. Furthermore, there was some adjustment in almost all expenditure items, except for public work, which grew a lot. Although, of course, its importance in numbers is relatively minor and it fails to twist the balance of social spending.

According to Congressional Budget Office (OPC), the surplus was 138,448 million pesos. It is, of course, a number not necessarily the same as the one published by the Treasury this Monday, since OPC publishes the accrued data of the national public administration and Rigo’s portfolio on the cash basis of the non-financial private sector. That is, one shows the accounting entry with expenses and income and the other the pesos actually entered and discharged in the cash register.

The economist of the consultancy Aerarium, Guillermo Giussinoted: “It is not surprising that there is a surplus in January, although for the year we project 4.7% of primary deficit. That there have been no transfers to the Treasury, from the BCRA, suggested a positive result. What draws from income is the growth of export duties, which are not shared and therefore everything goes directly to the Treasury. The collection did not grow so much, but for the Nation what happens with the VAT does not imply so much loss, because it participates. In 2021, the positive effect is forecast to last throughout the year, with high commodities and a good harvest, and the equivalent of 8,000 million dollars will be raised ”.

The Export rightsIn fact, during January they grew 231.2% compared to the levels of the same month of 2020. But they also hit a 180.3% jump in the comparison against December. In other words, that income tripled via withholdings, thanks to the effect of the price of commodities, the highest liquidation of agriculture compared to several months of betting on a devaluation that it did not happen and also due to the effect of the end of the oil and port strike.

And Giussi added: “On the cost side, it is not surprising, either, because what drives the most is the social security, retirement, pensions and AUH, which moved below inflation during 2020. The increase, which according to our estimates will be 8.2%, will only be in March, so in January there is not too much pressure on spending. The public work, which grew a lot, does not move much in total spending. They are smaller numbers. Retirements outweigh in importance ”.

While the public wages fell 4.5% real, operating expenses in total grew 3.8% real, as there were more purchases of pharmaceutical products, in the context of the pandemic. The current transfers to the provinces they fell 34% real. And the economic subsidies they grew 336% in real terms, due to a low base of comparison.

And, it should be noted, the OPC report highlighted that the 5,000 peso bonus delivered by the Government during January 2020 generated a high comparison base, which explains a real 10% contraction in spending on social benefits. Without that, the drop would still have been 4.1%, anyway.