Argentina’s treasury ran yet another primary surplus in September, reaching ARS 816.4 billion, significantly above the deficit of ARS 380.5 billion posted one year earlier. The nominal fiscal balance also posted a surplus of ARS 466.6 billion, contrasting with the deficit of ARS 511.5 billion in September 2023. As a result, the primary balance through 3Q24 reached a surplus of 1.7% of GDP, while the nominal balance stood at 0.4% of GDP. Based on these figures, we estimate a consolidated nominal deficit of around 1.8% of GDP year to date (including net interest payments from the central bank), narrowing significantly from 9.4% deficit in the same period of 2023.
Real tax revenues fell in 3Q24, mainly affected by the cyclical contraction in economic activity. Tax collection fell by 5.2% yoy in real terms in the period, after dropping by 3.9% in 2Q24. Total real revenues decreased by 8.9% yoy in the period (-5.6% in 2Q24).
Strict control on expenditures continued in 3Q24. Primary expenditures declined by 24.1% yoy in real terms in the period, compared with a 30.0% yoy drop in 2Q24. Pension payments were down 12.4% yoy (-19.8% in 2Q24), while payrolls decreased by 20.8% yoy (-17.2% in 2Q24), both affected by the still high levels of annual inflation. Capital expenditures were down sharply by 74.7% yoy (-76.7% in 2Q24) due to the freeze on public works. Energy subsidies fell by 12.8% yoy, compared with a drop of 44.2% in 2Q24, while transfers to provinces plunged by 64.6% yoy.
Our take: We recently improved our fiscal projections for 2024 and 2025, in line with the budget bill’s forecasts, reflecting this year’s progress and the administration’s commitment to the fiscal accounts. In our view, the new fiscal rule included in the 2025 Budget bill is a step in the right direction of building credibility for the fiscal anchor. We expect a balanced nominal fiscal result for 2024 and 2025.
Andrés Pérez M.
Diego Ciongo
Soledad Castagna