In May the National Public Sector had a Primary surplus of $25.974 billion, which implies an improvement of $33.792 million in relation to the deficit of $7.818 million recorded in May 2018. The Total resources grew by 53% In year-on-year terms (yoy), 17 percentage points (pp) above the increase shown by primary expenditure (35,5% yoy).
For its part, the financial deficit -which includes the payment of interest on public debt- was $38.634 million registering in relation to May 2018 a increase equivalent to 41%, and a reduction in real terms of 10,2% year-on-year.
Total revenue for the month was $320.348 million, and grew 12 points above the dynamics shown in the first four months of the year. Among them, tax resources stood out - net of the deduction for co-participation to the provinces - which reached $ 296.861 million and showed a year-on-year growth of 55,2%.
Among these, the Export Duties stood out. (351,4% ia), the Tax on Earnings (52,7%), the Value Added Tax (52,2%), the Tax on credits and debits (50,6% yoy) and contributions to social security (32,7% yoy). The rest of the resources of the Non-Financial Public Sector showed an increase of 29,2% yoy in April.
According to the Treasury, lPrimary expenses reached $294.374 million, growing 35,5% yoy in nominal terms and decreasing 13,8% year-on-year in real terms.
Capital expenditure reached $19.725 billion, where increases in the purpose stood out Transport (99,9% year-on-year), Housing (53%) and Water Potable and Sewerage (26,6% year-on-year), while the rest of the purposes showed annual decreases. Almost a fifth of the capital expenditure in May was paid with external financing.
Social benefits increased by 38,4% year-on-year, where the following stood out: retirements and pensions contributory, which increased 38% year-on-year, and the Non-contributory pensions and family allowances, which together grew 35,7% year-on-year. The growth observed in May was highlighted universal allocation per child (71% year-on-year) due to the 46% increase in the benefit granted in March. On the other hand, the rest of the social benefits, including those provided by PAMI, increased by 31,5%.
Current transfers to the provinces increased by 124,5% year-on-year, with increases in those destined for Social Development (568,0% year-on-year), Social Security (153,5% year-on-year) and Education (+95,1% year-on-year).
Transfers to universities increased 37,5% yoy, while operating expenses increased 39,3% yoy, due to an increase in personnel expenses of 37,9% yoy and an increase in goods and services of 43,6% yoy.
Within these last ones Expenditures for the purchase of vaccines stood out through the program “Prevention and Control of Immunopreventable Health Diseases” (Government Health Department) which increased by 233%, and the items related to the food policy program of the Ministry of Health and Social Development, which registered a year-on-year variation of 369%. Excluding these two concepts, spending on goods and services grew by 19% year-on-year.
LEconomic subsidies increased by 10% ia, showing the lowest growth of the year and slowing down in relation to the growth shown in the first four months (+71,3% yoy). Within these, energy subsidies showed an increase of 22,5% yoy while those destined to transport fell 11,8% year-on-year.
Interest payments increased by 231% in May, mainly due to two factors: first, the impact of the rise in the exchange rate (+90% yoy) on foreign currency-denominated interest (approximately 70% of the total this month). Second, due to changes in the debt service profile (in May, services were disbursed for $15.500 billion for Fixed Rate National Treasury Bonds maturing in 2020 and $12.000 billion for IMF disbursements, which were not in the same month of 2018).
These two factors suggest that interest growth will slow down in the coming months., while in the forecast for the whole of 2019 they will maintain the same relationship with the GDP established by the National Budget (3,2%). It should also be noted that 0,6% of the GDP of these interests are paid to the Central Bank and Banco de la Nación Argentina.
In lIn the first five months of the year, the non-financial national public sector showed a primary surplus of $36.819 billion (0,2% GDP), improving by 0,5 pp compared to the same period in 2018. This improvement occurred after income grew 10 points more than primary expenses (43,4% ia vs. 32,9% ia).
In turn, the Financial result was -$219.489 (-1,0% GDP), growing 35,2% in nominal terms but falling 12% year-on-year in real terms and 0,1 points of GDP.
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