Argentina June primary budget surplus ARS790.53B

Argentina June primary budget surplus ARS790.53B

Argentina's government reported a primary budget surplus of ARS790.53 billion for the month of June, marking a significant milestone in the country's fiscal health. This figure, announced by the Economy Ministry, reflects a continuation of the government's austerity measures aimed at controlling inflation and stabilizing the economy.

The primary budget surplus is the difference between total revenues and total expenditures, excluding interest payments on public debt. The ARS790.53 billion surplus represents a 1.6 percent increase in consumer prices for June, as reported by the INDEC national statistics bureau. This slight uptick in inflation is a positive sign, as it indicates a potential stabilization in the inflation rate after a series of significant decreases [1].

The annual inflation rate stood at 39.4 percent in June, a substantial improvement from the 211 percent rate at the end of 2023. This reduction in inflation is largely attributed to the government's aggressive austerity measures, which have included significant cuts to public spending, the elimination of tens of thousands of government jobs, and a halt to many public works projects [2].

The June inflation data was driven primarily by increases in education costs, which climbed 3.7 percent, and housing, rent, water, and electricity prices, which rose by 3.4 percent. Conversely, the lowest increases were recorded in food and non-alcoholic beverages, which rose by 0.6 percent, and clothing and footwear, which increased by 0.5 percent [1].

The improving inflation numbers have done little to quell the anger of Argentines over a loss in purchasing power, with wages remaining stagnant despite years of price rises. According to INDEC data, a typical family of four needed 1.128 million pesos in June to avoid falling below the poverty line [1].

Argentina's fiscal discipline has also earned the country a strong vote of confidence from the International Monetary Fund (IMF), which recently disbursed the first $12 billion of a $20 billion loan. The IMF praised the government's early progress in stabilizing the economy, noting that the loan was built on a strong fiscal anchor that is delivering rapid disinflation and a recovery in activity and social indicators [1].

In contrast, the United States also reported a significant fiscal improvement, with a $27 billion budget surplus in June. This surplus was driven by a surge in customs revenues and substantial cuts in education spending [3].

The primary budget surplus of ARS790.53 billion in June is a testament to Argentina's commitment to fiscal discipline and its ongoing efforts to stabilize the economy. While challenges remain, the improving fiscal numbers suggest that the government's austerity measures are having a positive impact.

References:
[1] https://www.batimes.com.ar/news/economy/milei-celebrates-as-june-inflation-data-beat-expectations.phtml
[2] https://www.batimes.com.ar/news/economy/monthly-inflation-in-argentina-inches-up-but-remains-low.phtml
[3] https://anewz.tv/world/world-news/10500/us-reports-27b-june-budget-surplus-customs-revenues-soar/news