Argentina’s treasury ran yet another primary surplus in October, reaching ARS 746.9 billion, significantly above the deficit of ARS 330.3 billion posted one year earlier. The nominal fiscal balance also posted a surplus of ARS 523.4 billion, contrasting with the deficit of ARS 454.2 billion in October 2023. As a result, the primary balance over the last 12-months in October reached an estimated surplus of 1.7% of GDP, while the nominal balance stood at 0% of GDP. Based on these figures, we estimate a consolidated nominal deficit of around 1.6% of GDP year to date (including net interest payments from the central bank), narrowing significantly from 10.6% deficit in the same period of 2023.
Real tax revenues fell in the quarter ended in October, mainly affected by the contraction in economic activity. Tax collection fell by 12.5% yoy in real terms in the period, after dropping by 5.2% in 3Q24. Total real revenues decreased by 16.2% yoy in the period (-8.9% in 3Q24).
Strict control on expenditures continued at the beginning of 4Q24. Primary expenditures declined by 29.3% yoy in real terms in the period, compared with a 24.1% yoy drop in 3Q24. Pension payments were down 16.2% yoy (-12.4% in 3Q24), while payrolls decreased by 25.4% yoy (-20.8% in 3Q24), both affected by the still high levels of annual inflation. Capital expenditures were down sharply by 73.9% yoy (-74.7% in 3Q24) due to the freeze on public works. Energy subsidies fell by 17% yoy, compared with a drop of 12.8% in 3Q24, while transfers to provinces plunged by 60% yoy.
Our take: Our primary fiscal balance forecast stands at +1.5% of GDP for 2024, significantly above the deficit of 2.7% of GDP in 2023 due to the ongoing fiscal adjustment. November’s fiscal figures will be published on December 17.