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Argentina Posts September Fiscal Surplus Backed by Privatizations and Deep Cuts

The monthly surplus lifts the nine‑month balance while reliance on one‑time hydroelectric sales and steep discretionary cuts leaves meeting the IMF annual target uncertain.

Overview

  • The Economy Ministry reported on Friday that September produced a primary surplus of ARS 1.427.640 million and a financial surplus of roughly ARS 977.173 million, bringing the nine‑month primary balance to about 1.2% of GDP.
  • The nine‑month tally includes roughly ARS 1.04 trillion in one‑off proceeds from the sale of hydroelectric assets, a windfall that materially inflates the accumulated surplus when counted.
  • Revenue growth outpaced spending in September—officials cited a 36.5% year‑on‑year rise in total revenues versus a 32.2% rise in primary spending—yet real tax receipts remain weak and overall revenue performance is fragile.
  • Policy choices driving the result have been deep cuts to discretionary outlays, notably plunging capital spending, even as some indexed or politically sensitive items rose, including a 42.4% nominal jump in university transfers and a 44.1% increase in energy subsidies for September.
  • Analysts warn the government must post unusually large surpluses in October and November or seek an IMF adjustment or waiver during the third review, because a typical December deficit and limited room for further discretionary cuts make the agreed annual target hard to sustain.