$ 500 million more was spent in 2021 than in 2020; although the execution was less than that programmed by the Government itself.
In 2021, the Government has made efforts to lower its level of spending, although the rigid state structure has not facilitated the task.
According to the budget execution figures, in 2020 the Government had expenses of $ 21,901 million; while in 2021 it was $ 22,436 million, that is, $ 535 million more than the previous year. However, there is also another group of figures to analyze and that is how much of the 2021 budget was executed. When looking at this issue, it is observed that the government of Guillermo Lasso in 2021 had calculated to have expenses of $ 27,855 million, but in the end it only executed $ 26,787 million, that is, there was an adjustment of at least $ 1,000 million of what the Government itself had foreseen.
According to Jaime Carrera, executive secretary of the Fiscal Policy Observatory, the figures reveal that the Government has a problem of structural current spending, which it can hardly combat. For example, when comparing the budget execution of 2020 with that of 2021, salaries continued to rise, going from $ 8,940 million to $ 9,219 million.
It is also observed how in the matter of social security the amounts allocated are still high (and despite this insufficient, according to the IESS). The allocated figure in 2020 was $ 1,027 million and in 2021 it was $ 1,243 million. Part of these items that were increased, says Carrera, was destined to the Institute of Social Security of the Police (Isspol). For the expert, this budget increase means that corruption issues that have happened with the Chérrez case have begun to take their toll on all citizens.
In an issue in which there is a decrease compared to 2020, it is in the payment of interest, but this is not necessarily due to a government effort, but is the result of the renegotiation of the bond debt that allowed there to be a decrease of interest for $ 1,054 million. There is also an increase in resources directed to decentralized autonomous governments (GAD), due to better tax collection and better oil revenues, in accordance with the Law. In terms of goods and services, a decrease is seen, since this item goes from $ 1,688 million in 2020 to $ 1,665 million in 2021 – a reduction of $ 23 million. Thus, Carrera maintains that in this budget execution a set of increases is noted on the one hand and reductions on the other, which in the end ends in an increase in spending. He admits that it was very difficult for the Government to lower said spending, since 2020 was a year of a very important economic contraction.
On the other hand, Carrera comments that the current spending structure does not leave much room for investment.
In any case, he adds, health spending has increased due to the purchase of medicines. It also explains that the largest expenditure on goods and services is in education, health, Police, Armed Forces and universities. 70% of goods and services are dedicated to this, he says.
Spending is almost the same as in 2020, but that of 2020 was low due to the effect of the pandemic, the economy was paralyzed, the public sector was paralyzed, less was spent due to part-time measures, and that spending compared to 2020 was What it represents in the future is that the reference will be 2021 and if it is normalized in 2022, there will be more demands.
The problem of the Government is to face how to lower the public wage bill and how to face within that spending structure, which is limited and inflexible, the demands that will exist, if education is normalized.
Meanwhile, Santiago Mosquera, dean of the Business School of the University of the Americas, believes that if compared to 2020, there has effectively been no reduction in spending, but rather an increase. However, he estimates that the Government should have operated for a few months with the extended 2020 proforma, so that then finally towards the last months of the year the Assembly approved the 2021 one. In any case, it emphasizes that there was a reduction in spending on the execution by comparing what you had budgeted to spend and what you actually spent ($ 27,855 million budgeted and $ 26,787 million executed).
He also explains that in 2020 the level of spending was too low due to the pandemic, so it was illogical to think that spending could have been reduced with respect to that reference.
Both Carrera and Mosquera consider what will happen from now on is important. On the one hand, for Carrera, the state demand that is going to recover as a result of normalization or economic reactivation could require more resources, and it will be then that the Government must seek to control that this expense does not get out of hand. .
On the other hand, Mosquera is concerned in the latest data from the national accounts about the growth rate of imports, which has been greater than 20%, when exports did not grow. This would generate a problem in the balance of the balance of payments, he maintains. (I)
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