The Ministry of Economy sent the 2023 budget bill to Congress with a surprise. The draft contains a first text based on the objectives of the agreement with the International Monetary Fund (IMF) and an appendix that proposes that Congress discuss amending or eliminating special regulations that account for 2.4% of gross domestic product (GDP), to significantly reduce fiscal deficits – and even create a surplus – and combat inflation.
Among these are income tax judges’ payroll schemes, or Tierra del Fuego’s internal tax benefits. “If you dare study these advantages (corporate tax incentives, set by the IMF), such as judges not paying dividends and special rates for financial sectors, if you think we can improve the goals, we have this list,” official sources on the political message explain.
Among the strongest fundamentals of the 2023 budget are annual inflation of 60% and growth of 2%. The official program for the coming year also includes a dollar estimate of 269 Argentine pesos ($1.91) by year-end (219 pesos on average, about $1.56) and a primary fiscal deficit equal to 1.9% of GDP, respectively. With what is stipulated in the agreement with the International Monetary Fund. After accounting for interest, the financial red will rise to 3.9 percent.
As it happens every year, the project entered the House of Representatives, which would analyze it in committees and then discuss it in the building. On his return from his US tour, Economy Minister Sergio Massa reviewed the latest figures.
Among other points, the official proposal estimates investment growth well below this year’s level: it will move from 10% to 2.9% in 2023.
Always in line with the expectations set out by the government in the roadmap, private consumption is also expected to decline sharply, from 6.5% in 2022 to just 2% growth next year.
On the other hand, the government estimates that exports will grow by 7.1% in 2023, while imports will increase by 2%. This brings the trade surplus from $7,751 million in 2022 to $12,347 million in 2023.
Regarding inflation, the project expects a level of 95% for this year, to slow down to 60% over the next year, which will remain at very high levels. In the labor market, unemployment is expected to remain at around 7% and incomes to recover only 2%.