Milei exceeded the IMF's target: May closed with a surplus and nearly $7 trillion in excess.

porEditorial Team

Argentina

The government achieved a primary surplus of $1.6 trillion in May and accumulated nearly $7 trillion, surpassing the IMF target

The National Government closed May with a fiscal surplus higher than the commitment made with the International Monetary Fund (IMF), consolidating the fiscal anchor as a pillar of its economic program and reaffirming the historic shift in the management of the State. This was announced by the Minister of Economy, Luis Caputo, through his official account on X, highlighting that "the fiscal surplus achieved in the first five months of the year reflects the Ministry's commitment to balancing public accounts", one of the central pillars of the model implemented since December 2023.

In detail, the National Public Sector (NPS) recorded in May a primary surplus of $1.6 trillion, equivalent to 0.2% of the Gross Domestic Product (GDP), and a financial surplus of $662.123 billion. With these figures, the accumulated total for the year reached a primary surplus of 0.8% of GDP and a financial surplus of 0.3%, far exceeding the first target of the agreement with the IMF, which provided for a surplus of $6 trillion before interest payments. The result obtained through May approached $7 trillion, representing a categorical overachievement of the target.

Caputo celebrated that this result made it possible to advance in the reduction of taxes by more than two points of GDP, dismantling inherited burdens that hindered competitiveness and growth. Among the most notable measures is the scheduled elimination of the PAIS Tax starting in December 2024, the reduction of export duties for regional economies, and the lowering of tariffs and domestic taxes for technological products since May 20.

Tax collection and revenues

Regarding May revenues, the official report indicated that total NPS revenues reached $11,374.130 billion, with a year-on-year growth of 23.6%. This figure was partially affected by a 19.9% decrease in Income Tax collection, explained by a high comparison base in 2023, derived from extraordinary results in the financial system in 2023.

Nevertheless, other taxes showed a very solid performance. The following stood out:

Debits and Credits Tax: +76.3% year-on-year

Social Security Contributions: +64.5%

Net VAT after refunds: +42.9%

This data supports a total increase in tax revenues of 22.6% compared to the same month of the previous year.

Public spending: order and rationality

On the spending side, NPS primary expenditures totaled $9,677.213 billion in May, recording a year-on-year increase of 40.8%. Social benefits represented the largest component, with $6,291.623 billion (+57.3% y.o.y.), explained by the application of the current mobility formula (Law No. 27,609) and DNU 274/24, which demonstrates that the adjustment did not imply cuts in sensitive areas.

Regarding public sector salaries, these totaled $1,275.277 billion (+35.8%), in line with collective bargaining agreements. Current transfers amounted to $3,389.188 billion (+22.4%), with greater dynamism toward the public sector (+59.9%) compared to the private sector (+16.8%).

A key point was the sharp cut in economic subsidies, which fell 33.7% year-on-year, with a drastic adjustment in energy subsidies (-49.1%), while transport subsidies increased 64.2% in the context of tariff and compensation restructuring. This reorganization confirms the government's focus on the efficient allocation of resources and the elimination of distortions.

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