Inflation suffers government spending rise: 40% more
Portada en Ingles
Government has not changed its vocation for rising spending month after month. In Mrch, it nearly hit 40 per cent. This situation is unsustainable and results in greater pressure on prices. What's even worst is that fiscal saving is being lashed, something government considers a pillar of economy. In March, it settled at ARG$2.4 billions, though thanks to ARG$1 billion transferred by Central Bank. Inflation is already affecting consumption and investment, which, in turn, hits collection. The vicious circle is starting.
Also with respect to revenues, we will see a loss of the so-called extra resources, like fund transfer by pension funds due to last year reform, which offered the possibility of shoring up Treasury's financial result. In view of this, collecting performance of the first quarter of 2008 gets even stronger, despite effect of export tariff rise.
So far 2008, Treasury would have accumulated a primary surplus close to ARG$9 billions. Thus, a third of 2008 total private sector estimated would have been achieved.
It's worth mentioning that annual budget goal aims at 3.5 per cent of GDP of primary fiscal surplus. In this sense, farm export tariffs are crucial to accomplish such goal.