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An appreciated currency was a drag for oil and tax revenues.
2024/01/31 | Julio Ruiz

The nominal fiscal balance stood at a deficit of 3.3% of GDP in 2023 (3.2% in 2022), in line with the MoF’s most recent estimate, yet below Congress’ approved target (3.6% of GDP).  The primary balance stood at a deficit of 0.1% of GDP, better than the approved deficit target of 0.2% of GDP, but below the MoF’s estimate of a surplus of 0.1% of GDP. Oil and tax revenues underperformed (relative to the approved budget amount), which was mitigated by lower than targeted primary expenditures and financial cost and higher “other revenues” (see chart below). Oil revenue weakness reflects an appreciated currency, while tax revenues underperformance is explained mainly by weak VAT receipts (also reflecting an appreciated currency which affected imported values). Net public debt stood at 46.8% of GDP at the end of 2023 (compared to 47.6% of GDP in 2022), while the historical balance of public sector borrowing requirements (the broadest measure of debt), stood at 46.8% of GDP (down from 47.8% of GDP).


Our take:  We expect a widening of the nominal fiscal deficit to 4.9% of GDP (a primary deficit of 1.2% of GDP) this year, in line with the 2024 fiscal budget. Our more optimistic currency forecast for this year (relative to the MoF’s assumption) could be a drag to fiscal revenues this year. However, said shortfall is practically offset by our greater oil price scenario versus the MoF’s estimates. The widening of the fiscal deficit this year reflects greater expenditures in subsidies (associated to social programs), which will be supportive for activity this year, besides a higher financial cost. 


See detailed data below