Plenty of hot words (not to mention violent clashes) accompanied the passage of the 2019 Budget by a 138-103 vote on Thursday morning, but below follow the cold numbers as summarised in 15 main points.
– Zero deficit: the fiscal red ink reaching 2.6 percent of Gross Domestic Product this year is to be wiped out in the 2019 Budget but only at the level of primary deficit since interest payments on the debt will rise almost 50 percent.
– Recession: the economy is expected to shrink 0.5 percent next year after slumping 2.4 percent this year.
– Dollar: an average of 40.10 pesos next year, 44.30 in 2020; 48.20 in 2021; and 50.5 in 2022.
– Inflation: 23 percent annually by the end of 2019 but averaging 34.8 percent in the course of the year. This year’s inflation is officially calculated to reach 42.7 percent.
– Private spending: consumer spending is forecast to fall 1.6 percent and investment 9.7 percent.
– Public debt: Tipped to reach US$315.7 billion by year’s end or 87 percent of GDP.
– Financing: servicing needs will reach US$38.9 billion dollars with US$2.5 billion in new debt and US$20.1 billion to be rescheduled – US$11.7 billion by the International Monetary Fund (IMF) and a further US$4.6 billion by international organisations.
– Taxation: the revenue from national taxes and social security contributions will rise 38.9 percent to reach 4.83 trillion pesos.
– Total public spending: primary spending will be 3.43 trillion pesos, 27.4 percent higher than this year in nominal terms but 13 percent lower in real terms (after taking into account projected inflation) with current expenditures shrinking 11 percent and capital expenditure 42 percent.
– Cuts: Spending on social services will fall by six percent in real terms; by 23 percent on education and culture; by 48 percent on housing and urban programmes; by eight percent on health; by 17 percent on science and technology, etc.
– Balance of payments: to improve by over 50 percent by the end of 2019, closing on a deficit of US$9.9 billion or 2.2 percent of GDP.
– Export duties: reduced from 33 back to the current 30 percent for soy, while maintained at 12 percent for other products.
– Compensation fund: This fund, partially compensating municipal governments with an extra 6.5 billion pesos for the withdrawal of national subsidies from urban transport, will be maintained until end of 2020.
– Personal assets tax: amended to raise the 2018 floor of 1.05 million pesos to 2 million next year (rural property will remain exempt). The scheme will be progressive: 0.25 percent for 2-5 million pesos worth of assets, 0.5 percent for 5-20 million and 0.75 percent for all figures topping 20 million.