Argentina 2022 Budget Sees Primary Deficit Falling to 3.3%

Argentina 2022 Budget Sees Primary Deficit Falling to 3.3%

11:58 - Argentina’s budget bill for 2022, submitted to the Lower House of Congress before midnight Wednesday, expects the government to curb spending.

South America’s second-largest economy expects to post a primary fiscal deficit of 3.3% in 2022, down from 4% in 2021, according to an Economy Ministry official, who asked not to be named because the text of the bill is not yet public. The government also revised its forecast for inflation for 2021 to 45.1%, faster than its previous expectation of 29% annually.

The government is proposing to curb its spending just days after a primary midterm vote signaled that the ruling coalition is poised to lose key congress seats in November, after performing worse than expected. The country is also in the middle of talks with the International Monetary Fund to renegotiate a $45 billion loan. Earlier Wednesday, President Alberto Fernandez had said that the budget would include the assumption that a deal with the Fund would be reached.

Fernandez met the Sept. 15 deadline to submit the budget amid a political crisis that included several ministers offering their resignations.

Other points in the bill include:

The government sees 2022 inflation at 33%
The government sees the spot peso to end the year at 102.4 per dollar in 2021 and 131.1 per dollar in 2022
Financing from the central bank in 2022 is expected at 1.8% of GDP
To cover remaining needs, it expects to get funds via local debt auctions equivalent to 2% of GDP and lending from international organizations at 1.1% GDP
2022 energy subsidies are expected to be equivalent to 1.5% of GDP
The government could lower those subsidies to as low as 0.3% of GDP in the medium term through a potential electricity price differentiation plan, still to be determined
The budget doesn’t include plans for a wealth tax in 2022
The 2022 budget doesn’t include any capital payments to the IMF, the official added
Real wages are expected to grow 4%, up from 3.8% in 2021
Exports seen at 7.5% (down from 12.2% in 2021) and imports at 9.4% (down from 26.2%)
2022 trade balance seen at $9.3 billion, down from $12.9 billion in 2021 es un sitio web oficial del Gobierno Argentino