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last mo.

Argentina Reports July Primary Surplus but Financial Deficit, Reviving Dispute Over Capitalized Interest

IMF staff argue that counting capitalized interest would flip the year‑to‑date surplus into a deficit, a view shared by independent analysts.

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El ministro de Economía, Luis Caputo. 

Overview

  • Official data show a July primary surplus of ARS 1.749 trillion alongside a financial deficit of ARS 168,515 million, the first monthly financial shortfall of 2025.
  • Economy Minister Luis Caputo attributed the red ink to seasonally heavy coupon payments on Bonares and Globales and the public‑sector mid‑year bonus, citing ARS 1.918 trillion in net interest outlays.
  • The government maintains a January–July primary surplus near 1.1% of GDP and a financial surplus around 0.3% of GDP under its accounting that excludes capitalized interest from the financial result.
  • The IMF’s latest staff report warns that including capitalized interest would imply a deficit of about 1.2% of GDP through May, while new private estimates put the gap closer to 1.6% of GDP year‑to‑date.
  • Independent tallies highlight the scale of the issue: Congress’s budget office pegs nominal interest near 2.9% of GDP and CEPA estimates that adding capitalized Lecap interest would swing the seven‑month financial balance from a ARS 2.93 trillion surplus to a ARS 14.78 trillion deficit.