Argentina’s treasury ran yet another primary surplus in November, reaching ARS 1381.5 billion, significantly above the deficit of ARS 210.5 billion posted one year earlier. The nominal fiscal balance also posted a surplus of ARS 357.2 billion, contrasting with the deficit of ARS 755.0 billion in November 2023. As a result, the primary balance in the year through November reached an estimated surplus of 2.1% of GDP, while the nominal balance stood at +0.6% of GDP. Based on these figures, we estimate a consolidated nominal deficit of around 1.5% of GDP year to date (including net interest payments from the central bank), narrowing significantly from 12.0% deficit in the same period of 2023.
Real tax revenues declined in the quarter ended in November, but at a slower pace due to the recovery in economic activity at the margin. Tax collection fell by 0.4% yoy in real terms in the period, after dropping by 5.2% in 3Q24. Total real revenues decreased by 7.9% yoy in the period (-8.9% in 3Q24).
Strict control on expenditures continued in the quarter ended in November. Primary expenditures declined by 24.1% yoy in real terms in the period, marking the same drop as in 3Q24. Pension payments were down 5.1% yoy (-12.4% in 3Q24), while payrolls decreased by 19.8% yoy (-20.8% in 3Q24), both affected by the still high levels of annual inflation. Capital expenditures were down sharply by 73.2% yoy (-74.7% in 3Q24) due to the freeze on public works. Energy subsidies fell by 4.8% yoy, compared with a drop of 12.8% in 3Q24, while transfers to provinces plunged by 64.2% yoy.
Out Take. Higher fiscal surplus in 2024. In the communiqué, the Ministry of Economy warned of the seasonal fiscal deficit expected in December (mainly due to pension and wage bonuses). However, the official estimate is of a 1.9% of GDP primary surplus (from a deficit of 2.7% of GDP in 2023). The expected surplus is even higher than the projection of 1.5% of GDP surplus for 2024 included in the Budget bill for next year. For 2025, we estimate a primary surplus of 1.3%, consistent with a balanced nominal budget. Revenues should continue to improve, as 3Q24 national accounts data confirmed the economy exited the recession at a faster-than-expected pace.