The Economic Regime Commission of the National Assembly unanimously approved the non-binding report of the proforma of the general State budget 2023 and the four-year budget programming 2023 – 2026, with some observations.
The proforma budget for 2023 is 11% less than that of 2022, with an amount that amounts to $31,503 million, whose budget was prepared based on a barrel of oil of $64.8 and an annual production of 187.9 million barrels.
Proforma: A conservative crude oil price and very optimistic growth are observations made in the National Assembly
Assemblyman Johnny Terán Barragán (PSC), presented the motion to approve the report with some observations presented by all political sectors. The motion received the unanimous vote of the nine legislators who are members of the table and will be reported to the plenary session of the Assembly for its approval in a single debate.
Among the recommendations made by the assembly members, it is highlighted that in the codified budget of 2023 the adjustments corresponding to the price of a barrel of oil should be made to reflect that actually received by the country in such a way that there is no affectation to the Decentralized Autonomous Governments and other entities with pre-assignments.
They also recommended that the bases for calculating the values in the 2023 proforma be supported, in such a way that compliance with the twenty-second constitutional transitory is evidenced.
In addition, the resources will have to be allocated so that the universities can cover the decreases in their annual investment plan with respect to the proforma codified in August 2022. The redistribution must prioritize the universities that maintain a budget reduction for the year 2023 with respect to to the code of August 2022.
In the 2023 codified proforma, the decrease of $5.95 million identified by comparing the 2023 proforma with the codified value as of August 2022 must be reversed for the National Police.
Likewise, it is recommended to reverse the 22.84% decrease in the public works category, a reduction that in nominal terms is $118.04 million when comparing the 2023 proforma with the August 2022 code, in order to comply to the resolution of November 1, 2022 of the National Assembly and to resolution No. 001 – 2021 of the Vice Ministry of Transportation Services and Public Works.
conclusions
From the analysis carried out by the legislative committee, it is concluded that the 2023 proforma is based on macroeconomic assumptions that contain inconsistencies between what is stated in the justification of the proforma and its fiscal risks annex, since for the indicator of economic growth the parameter is overestimated when placing it at 3.1% when the estimates referenced by the same Ministry of Finance date from estimates that on average are close to 2.6%.
On the other hand, in the case of the price of oil, there is a valuation outside the estimates of international and private agencies that the same Ministry of Finance and the commission determined that the average value of said estimates is $90.77 per barrel. for the WTI marker, when the value included in the 2023 proforma is set at $64.84 for the Ecuadorian marker.
The pro-government legislator, Blanca Sacancela, commented that this observation made about the price of a barrel of oil projected for 2023, is collected and respected, but commented that the Government’s economic policy has always been the responsible management of resources, and in that In this sense, a proforma cannot be generated with an overly optimistic value, considering that the price of oil is volatile.
Sacancela highlighted that the 2023 tax collection is an important component within the proforma after the application of the Economic Development law, and that will allow increasing the items for investment in the social area and in the security axis where he assured that there is a evident increase of $185 million.
Regarding the overall result, the proforma shows a fiscal deficit of $2,629.92 million, which represents 2.1% of GDP. Likewise, there is evidence of a deficit in the balance between income and permanent expenses of $1,460.59 million, it should be clarified that this does not constitute a breach of the fiscal rule given that by exception permanent expenses in education, health and justice can be covered with non-permanent income in accordance with Executive Decree 170.
The constitutional and legal pre-allocations for the case of initial, basic and high school education, as well as for the public health system do not report the final balances, and therefore, there was difficulty in verifying strict compliance with the respective allocations, is another of the observations made by the Commission.
The social spending comprised by the sectors of education, health, social welfare, labor and urban development, and housing amount to a total of $11,011.89 million, which reflects an increase of $1,084.50 million compared to the code of August 2022, a relative increase of 10.92%.
In the analysis, the legislators warn that there is a 22.84% decrease in the public works category, the reduction in nominal terms is $118.04 million, bringing the total public works category to $398.81 million.
Likewise, it should be noted that the Annual Investment Plan has a reduction of $147 million, with which the total allocation for investment projects amounts to $1,871.47 million, in relative terms the decrease amounts to 7.32%, in relation to the coded August 2022.
The legislators determined that there is an increase in the higher education allocation of $17.93 million, bringing the total allocation to $1,306 million. However, there are institutions that reduce their allocation compared to the codified of August 2022, there is also a reduction of $128.26 million in the Annual Investment Plan of universities and polytechnic schools, a situation outside the Ministry of Planning. The MEF authorities have highlighted that these differences are partially due to unearned committed balances that must be included during the 2023 execution.
They also consider that the national government must recognize in the 2023 proforma, the debt with the provincial, municipal and parochial Amazon decentralized autonomous governments who are beneficiaries of the allocation corresponding to the Amazon Sustainable Development Fund. (YO)
Source: Eluniverso
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