Argentina presents a 2024 budget with almost one point of primary deficit

The Executive of Argentina sent to Parliament the 2024 Budget bill, which assumes a primary deficit -0.9% of GDPa fiscal improvement compared to this year, as the first step to lower inflation, which is expected to be 70%, in an economy that will grow 2.7% next year.

“We want to get the deputies to discuss,” that “there is truly a fiscal improvement that allows us to establish the first condition for inflation to drop drastically,” the Deputy Minister of Economy, Gabriel Rubinstein, said this Saturday on Miter radio.

”Many opposition (deputies) are always wanting a fiscal improvement, we agree with that,” Rubinstein added.

The Argentine economy is going through macroeconomic imbalances, with inflation that last August was running at 124.4%, a shortage of international reserves and strong exchange restrictions that cause a gap between the official exchange rate and the parallel ones of 100%.

The project presented in Congress foresees that 2023 will close with an inflation of 135%, a 2.5% drop in the level of activity and a primary deficit of the public sector expressed on a cash basis of -1.9% of GDP.

The economic team expects that the wholesale exchange rate will remain around 350 pesos per dollar until November 15 and climb to 367 towards the end of the year and reach 600 pesos at the end of December 2024.

Rubinstein indicated that “the second condition” to lower inflation in Argentina “It has to do with the exchange market” because the “exchange gap is very harmful” and to reduce it the country should “have a significant amount of dollars,” from 5,000 to 10,000 million dollars.

He Budget 2024 It is especially relevant this year because it will be the one that must be executed by the Government that is elected on October 22 – or November 19, if a second round is necessary – and that will assume power on December 10, for a constitutional period of four years.

The Libertarian deputy and presidential candidate, Javier Milei, first in the primaries last August, requested days ago in a letter to delay the presentation of the Budget 2024 and the parliamentary debate until after the October elections.

The request was made to the Minister of Economy and candidate for the Peronist ruling party, Sergio Massa, but was criticized by the opposition coalition Together for Change, which has the former Minister of Security of the government of Mauricio Macri (2015-2019) as its candidate. Patricia Bullrich.

The Budget project was presented close to the closing date of September 15, which is the legal date to deliver the text to the Deputies, but the Executive does agree that it should be finalized with the new parliamentary conformation, after the elections. presidential.

“It is logical that we can wait for the formation of the new chambers,” said Rubinstein, that “the debate” will be “done by those who are going to be in Parliament on December 10.”

(With information from EFE)