RIO DE JANEIRO, BRAZIL – Out of the past 61 years, 54 closed with a fiscal deficit. In other words, in 9 out of every 10 years, revenues have been insufficient to finance public spending, according to conclusions reached by the Argentine Institute of Fiscal Analysis (IARAF) in its latest report.
One of the study’s most striking data shows that the fiscal deficit of the Argentine National Public Sector between 2008 and July 2021 reached US$250 billion, there was a fiscal deficit in 87% of months, i.e. the State spends more than it collects. In fact, it is both a collection and spending issue.
In the past 13 years and 7 months, spending has systematically exceeded revenues, with the sole exception of a few months at the start of the period (2008). Specifically, the fiscal result was positive in only 22 of the 163 months surveyed, while the remaining months posted a deficit.
As for the National Non-Financial Public Sector’s (NFFPS) total revenues, in 2008 they reached US$8.9 billion, then rose to a maximum of US$178.2 billion in 2015, declined to less than US$9 billion in 2019, and reached a low of US$6.8 billion last year.
According to the Institute, “society’s discussion should not be on how to finance the deficit but rather on how to solve the deficit problem, and thus avert the permanent consequences on socioeconomic indicators (poverty, unemployment, inequality) brought about by inflationary outbreaks, devaluations and defaults.”
“Efforts should focus on finding a sustainable solution over time, which requires a basic social consensus. The delicate situation merits the commitment of all players to define a sustainable economic policy path. The framework of an economic and social agreement could allow this and prevent short-term decisions that are inconsistent with long-term goals, which should essentially be aimed at seeking sustained economic development,” the Institute said.