Argentina achieves financial surplus for the first time in 12 years

Argentina achieves financial surplus for the first time in 12 years

The Argentine government of President Javier Milei announced Friday in Buenos Aires that the country had achieved a financial surplus for the first time in 12 years. In the first full month of the new administration, tax revenues grew by 256.9% which in addition to stringent cuts in public expenditure yielded these results, it was explained.

 In December 2023, Argentina’s primary deficit was US$ 2.384 billion, with a financial deficit of US$ 6.383 billion for a yearly 2.9 % drop of the Gross Domestic Product (GDP). Capital expenditures (energy, transportation, education, housing, drinking water, and sewage, among others) fell by 50.3% year-on-year in net terms. However, if the 254% interannual inflation is taken into account, the reduction is even more considerable.

It was Argentina’s first positive financial result since August 2012, Economy Minister Luis Toto Caputo noted. In January, the National Public Sector recorded a financial surplus of AR$ 518.408 billion (US$ 620 million) from a primary surplus and interest payments on public debt. It was also the “first financial surplus in a January month since 2011,” the authorities went on.

Echoing President Milei, Caputo posted on social media that a “Zero deficit is not negotiated” while the head of state posted an encouraging message for his official: “Vaaaaaaaaaaaamoooooo Toto…!!!” followed by his traditional war cry “Viva la Libertad Carajo” (long f***ing live freedom).

Also last month, Argentina’s public debt went up by US$ 10 billion as a consequence of its adjustment in pesos tied to inflation and the dollar, and due to the net increase of liabilities with the International Monetary Fund (IMF).

On the foreign trade front, export duties grew 574.3% yoy and import duties recorded an increase of 377.3%. In comparison, the PAIS Tax (a surcharge on expenditures abroad to make up for the gap between the official and the parallel exchange rates between the Argentine peso and the US dollar) recorded a year-on-year increase of 1,302.3%. Social Security Contributions went up 165.7% while last month property income grew by 327.4% y.a.