Argentina overcomplied with IMF primary deficit goal in 2022

The national public sector registered a 2.4% deficit, just below the 2.5% goal agreed with the international lender.

The Economy Ministry reported that Argentina’s primary deficit reached 2.4% of its GDP in 2022, meaning that the government over-complied with the 2.5% goal negotiated with the International Monetary Fund (IMF).

Meanwhile, the financial deficit came to 4.2% of GDP. In 2022, the national public sector registered an AR$502.12 billion primary deficit and an AR$745.71 billion financial deficit.

According to a press release, the result was the consequence of “the decisions on fiscal policy carried out by the Economy Ministry’s authorities with the goal of sorting out public accounts and the pre-existing deviations.”

The statement mentioned the “over-fulfillment of the fiscal goal” established in the Extended Fund Facility agreement the government signed with the IMF in 2022, after renegotiating the US$44 billion debt former President Mauricio Macri had acquired in 2018.

The new agreement establishes targets for international reserve accumulation, monetary emission and primary deficits.

During the year, primary spending in the public sector grew nominally by 70.5%, which constituted a real-terms reduction because inflation reached 94.8% in the same period. For six consecutive months, and especially since Sergio Massa took office in August,  spending has been plummeting in real terms – September, for instance, was the first month of 2022 in which the public sector showed a surplus. 

Economic subsidies grew just by 54.9% during the year, while energy subsidies rose by 57.7%. Transportation-related subsidies increased by 51.3%. Public sector income rose by 79%.

The IMF agreement’s primary deficit goal for 2023 is 1.9%.

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