Buenos Aires — Argentina’s government said on Friday the fiscal deficit for the year would be around 3.5%, below a previously amended target of 4%, a boost for the grains-producing country as it seeks to balance spending with the need to reduce its debts.
Argentina is locked in talks with the International Monetary Fund (IMF) to roll over some $45 billion in payments it cannot make and is preparing a multi-year economic plan that will be key to sealing a deal.
The IMF will want to see plans for reducing the fiscal deficit further, though the Argentine government has been clear it wants to avoid belt-tightening and instead improve taxation and find financing from multilateral lenders.
In a statement, the Economy Ministry said it was amending its budget for the year to take into account policy decisions already made that impacted primary spending, as well as an “increase in tax collection”.
“It is estimated that the primary fiscal deficit for the year 2021 will be around 3.5% of GDP,” it said.
In the government’s budget sent to Congress late last year it had targeted a fiscal deficit of 4.5% of gross domestic product in 2021 and an economic rebound of 5.5%. The fiscal deficit target was cut to 4% in September this year.
Economy Minister Martin Guzman has said recently that growth should top 9% this year amid a faster-than-expected rebound.
The economy is predicted to grow 4% next year, according to a draft 2022 budget, which has also pegged the fiscal deficit number at 3.3% of GDP for next year.
- Reuters (Reporting by Adam Jourdan and Walter Bianchi Editing by Frances Kerry)
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