In the first half of the year accumulated, total revenue fell by 6.2% year-on-year, in constant values. In Export Duties, the decrease is close to 60% per year, followed by the drop in fuel taxes (-41%), Profits (-10%) and COUNTRY tax (-8%).
In it National Public Sector (SPN), total revenues have fallen 11% annually, while primary spending has declined 7%, leading to a 46% increase in the primary deficit compared to the previous year. If the rhythm of income and expenditure is maintained, a primary deficit of 3.4% of GDP is expected at the end of 2023, exceeding the goal agreed with the IMF (1.9% of GDP).
To meet the primary deficit target with the IMF, primary spending should be 26% lower than that observed in the second half of 2022, and 18% lower than the monthly average from January to May 2023. The deficit is due to a a faster decline in revenue than in spending, and if tax revenues were the same as the previous year, a primary surplus of 0.19% of GDP would have been obtained. The fiscal trends of 2023 may be an opportunity to reduce the deficit in 2024 if the reductions in spending are maintained and revenue is recovered with a return to normality in agricultural production.
Two factors that could affect the optimistic vision for 2024 are an increase in spending in the second semester due to the elections and a possible drop in collection due to the need to adjust variables such as the exchange rate and tariffs.
Focus 1: Juan Manuel Garzón and Franco Artusso
Most of the cattle-producing provinces have not been able to recover the bovine stocks of 2007 due to intervention policies in the cattle and bovine meat markets. Cattle stocks have decreased from 58.8 million head in 2007 to 48.8 million in 2010, although they have recovered slightly and reached 54.2 million in 2022.
In the 10 main cattle-producing provinces, only one has exceeded the stocks of 15 years ago (Santiago del Estero), while the remaining 9 provinces have experienced reductions of more than 10% in their herds. In addition to the decrease in stocks, a change in the production system has been observed, with shorter production cycles and a decrease in the participation of fatter animals (steers).
The factors that could have caused this change include the instability of the rules of the game, an anti-export policy, an external demand focused on markets with low quality requirements, the increase in production costs in agricultural areas and the development of the intensive fattening in pens.
You can read the full report here: PRIMARY DEFICIT SITUATION REPORT
Editorial: Marcelo Capello, Nicolás Cámpoli and Juan Manuel López