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Private companies estimate that the deficit inherited by Javier Milei would be less than expected

The government has committed to International Monetary Fund (IMF) to reach December of this year with 2 points of primary fiscal surplus and has told Kristalina Georgieva, the managing director of the entity, that Alberto’s government Fernández left him a loss equivalent to 3 points. Therefore, he estimates that the correction that should be made is 5 points.

But actually, There are doubts that the inheritance received by President Javier Milei is of that magnitude. The numbers could be somewhat smaller and the consequence is that the magnitude of the correction should also be smaller.

Some Economists and consultants believe that in reality, the 2023 fiscal deficit was somewhat lower, close to 2.5% GDP points. Therefore, it is feasible to think about the hypothesis that Javier’s government Milei expanded the estimate to say it is making a deeper adjustment.

Something similar to what happened with December inflation, of which the president said that in the first two weeks it was moving at 45% and that therefore, The final 25% was a “numerazo”. If the 2023 fiscal deficit is lower than what Caputo presented, a Part of the adjustment announced to reach the surplus would already have been done before starting.


If the 2023 fiscal deficit is lower than what Caputo presented, a part of the announced adjustment would already be made before starting.

There are two examples of how the dialogue opposition can alter the minister’s plans. One is the case of the jlocations, which contemplates a reduction of 0.4 points in GDP. Congress would not allow this, introducing automatic recomposition formulas to the official project. Likewise, the government could lose 0.5 points of revenue due to the elimination of the generalization of export duties. If the 2023 starting point is lower than anticipated, these initially proposed adjustments may not be necessary.

The government is changing its discourse. QThey went from rejecting any type of change to the fiscal package (which would result in a surplus of 2 points) to saying that “zero deficit is not negotiated”. That is to say, perhaps, at the end of the day, Milei would be happy to reach December with balanced accounts.

In this regard, the economistSergio Chouza, who directs the consulting firm Sarandí, states in his report from the last week of December that the deficit had closed at 2.5% of GDP, while the director of the Center for Argentine Political Economy (CEPA), Hernán Letcher also believes that the year closed with that level of bankruptcy.


Sergio Chouza, through his consulting firm, suggests that the deficit had already closed at 2.5% of GDP

Sergio Chouza, through his consulting firm, suggests that the deficit had already closed at 2.5% of GDP

The Argentine Institute of Fiscal Analysis (IARAF) estimated until November 2023 that the accumulated primary deficit was 1.71 points of GDP, half a point lower than that of 2022. To reach the 3% that the government says, Javier Milei should have spent the equivalent of 1.3 points of GDP in Decembersomething that evidently did not happen.

The economist Eugenio Mari, from the Libertad y Progreso Foundation, proposes instead that For that entity “the primary deficit in 2023 is 2.9% of GDP”. “Clearly contrary to what was needed to start lowering inflation. Instead, he continued to bet on monetary financing, direct and indirect, which led to the rise in the CPI to 200% annually,” he said when referring to Alberto Fernández’s management. He recalled that all this was “against the commitment with the IMF, which was to reduce the deficit compared to the previous year and instead, it increased by more than 1 point of GDP”..

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