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Public investment fell 7.3% in real terms in 2023 and another decline is expected this year


February 25, 2024 – 12:40

The only item that marked an increase was energy due to capital transfers for the execution of various works, fundamentally the construction of the Néstor Kirchner Vaca Muerta Gas Pipeline.

Secretary of Energy

The public investment of the National Administration of Government during 2023 was $2,550 billion, which marked a 7.3% drop in real terms compared to the previous year according to the analysis of the execution of the accrued Budget carried out by the Congressional Budget Office (OPC). The only item that showed an increase was energy due to capital transfers to carry out various works, fundamentally the construction of the Néstor Kirchner Vaca Muerta Gasduct.

“Although in terms of GDP, public investment in 2023 was slightly lower than that of 2022 (1.3% vs. 1.4% in 2022), it remained at higher levels than in 2019 (1.2% of GDP) already 2020 (1.1% of GDP)”, detailed OPC.

The execution of the budget destined for Public investment in 2023 was 85 percent. The drop compared to the previous year is explained, first of all, by Real Direct Investment ($741,254 million), which fell 18.1% year-on-year and by Capital Transfers with a drop of 2% in that period.

Public investment: what is expected for 2024

Looking ahead to 2024, a new fall is expected given the strong fiscal adjustment that the Government of Javier Milei, who warned that funds for public works and transfers to provinces will be reduced as much as possible. The 17.6% of January’s fiscal surplus is explained by an 86% drop in capital expenditures, for example.

The work of Northern Gas Pipelinefor example, key to the energy supply of seven provinces of northern Argentinayes it will be done but this has more than 70% of the project with international financing.

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The execution of the budget allocated for public investment in 2023 was 85 percent.

The execution of the budget allocated for public investment in 2023 was 85 percent.

Public investment: what the funds were used for in 2023

As detailed by OPC, from the functional point of view of spending, four sectors concentrated more than half of the expenditures (68.4%): transport, energy, housing and urban planning and drinking water and sewage. “All functions decreased in real terms in relation to the execution a year ago, except the energy function, which included capital transfers for the execution of various works, such as the construction of the Néstor Kirchner Gasduct,” they explained.

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