Argentina Achieves Nine Consecutive Months of Fiscal Surplus

Argentina has maintained a fiscal surplus for nine months straight as of September 2024. The South American country has accumulated a primary surplus of about 1.7% of GDP in the first nine months of the year.

Additionally, it has achieved a financial surplus of nearly 0.4% of GDP during the same period. The Argentine government reported a primary surplus of 816,477 million pesos (approximately $837 million) in September.

The financial surplus stood at 466,631 million pesos (around $478 million) after a net interest payment on public debt. This marks the ninth consecutive month of surplus for the country.

The positive result stems from sustained and significant spending cuts, which have offset the moderate increase in revenue. The national public sector has maintained this trend throughout the year’s first three quarters.

Government officials emphasized the importance of this fiscal achievement, noting that the primary surplus aligns with sustainable spending patterns.

Specific situations, such as the Special Income Regime on Personal Property Tax, contributed to the revenue increase.

Argentina’s Fiscal Order and Economic Challenges

Luis Caputo, a key government figure, stressed the necessity of fiscal order for Argentina, pointing out that the country needs to regain credibility, unlike developed nations.

Felipe Nuñez, a ministerial advisor, highlighted that this is the first such achievement without defaulting. Revenue increased but at a slower rate than inflation.

Total income for the month reached 9,114,215 million pesos (approximately $9.35 billion), up 197.3% year-on-year. However, this represents a real decrease when compared to the 209% inflation rate over the same period.

Tax collection grew by 197.3% year-on-year, mainly driven by increases in Social Security contributions, export duties, and personal property tax.

The latter saw a significant rise due to the Special Income Regime. Taxes linked to economic activity grew at rates below inflation, including the Tax on Debits and Credits, net VAT, and Income Tax.

Martín Vauthier, an advisor to the Ministry of Economy, noted that the surplus was achieved through a 30% year-on-year reduction in primary spending in real terms.