The Ecosur Foundation of the Córdoba Stock Exchange has released a report detailing the fiscal adjustments made in the first quarter of the year. According to the report, these adjustments were a combination of drastic cuts and more subtle reductions. If the government continues with its current spending cuts, it could potentially achieve fiscal balance by the end of the year.
Francisco Ballester, director of economic analysis at the foundation, noted that all of the adjustments made so far have come from the expenditure side. While there have been changes in income composition, such as increased taxes and reduced profits, these changes have had little impact on overall budget totals. Ballester also pointed out that maintaining this level of spending will be challenging both politically and socially.
If the government can maintain its current spending levels throughout the year, it will be on track to meet its goal of a balanced budget. The foundation’s calculations suggest that maintaining first-quarter spending levels would result in a significant reduction in spending as a percentage of GDP, bringing it closer to financial equilibrium.
In terms of specific categories, public spending saw a significant decline compared to last year, with retirement benefits accounting for a large portion of this reduction. However, while retirement benefits were not necessarily the category with the largest reduction in absolute terms, their substantial share of total spending made their cut particularly significant in achieving overall budget adjustments.
Overall, while this report highlights government efforts to control spending and achieve fiscal balance, it also warns that maintaining these measures over time may pose challenges politically and socially.