Argentina says 2018 primary deficit outperformed IMF target
Argentina registered a primary fiscal deficit, which excludes debt payments, of 338.987 billion pesos ($8.992 billion) last year, equivalent to 2.4 percent of gross domestic product (GDP), Dujovne said at a news conference.
The deficit was smaller than the target of 2.7 percent of GDP agreed with the fund as a condition of the $56.3 billion financing agreement.
Including government spending on infrastructure projects, which the IMF asked Argentina to take into account as part of the primary balance, the deficit was 374.25 billion pesos. That also compares favorably with the IMF’s deficit target of 378.0 billion pesos, adjusted to include infrastructure spending.
The government sought the IMF’s help last year to halt a slide in the value of the peso. The local currency lost about half its value against the U.S. dollar in 2018. The run on the peso helped fuel inflation to 47.6 percent in 2018.
Dujovne said he expected the IMF to transfer $10.8 billion to the government in March, or about half his total estimate of disbursements for the entire year.
“We have met the goals set with the International Monetary Fund,” Dujovne said. “This ensures liquidity will be available for Argentina this year.”
President Mauricio Macri’s popularity has taken a hit from deficit-cutting austerity measures while Argentines contend with a shrinking economy. He has slashed subsidies for public utilities and other services, pushing up household electricity and gas bills. Rates are expected to continue rising this year.
The fund says it expects the country to pull out of recession in the second quarter. Macri is expected to run for a second four-year term in October.
The country’s financial deficit, including debt repayment, reached 727.927 billion pesos ($19.308 billion) in 2018, or 5.2 percent of GDP, compared to 6.0 percent of GDP in 2017, Dujovne said. It is expected to fall to 3 percent in 2019, he added.