The Increasing Debt Interest Payments in the National Budget are Outpacing Social Spending

Los debt interest payments It is the item that has been increasing the most in the National Budget and is equivalent to what the Government spends on the Universal Child Allowance, the Enhance Work plans, food policies and Family Allowances.

According to the Congressional Budget Office (CPO) as of September 30, interest on the debt totaled $2,300,638 million, real growth, above inflation, of 11.5% “mainly explained by the higher interest payments on foreign loans, in a context of rising international interest rates. Payments to the IMF accumulated $514,921 million in the year.”

On the other hand, the payments of the Universal Child Allowance (AUH) totaled $483,872 million, a real drop of 14.4%. The Family’s asignations of workers and retirees totaled $580,230 million, a decline of 35.6%. The plans Enhance Work They accumulated a total of $662,952 million in 9 months, a real drop of 1.6%. and the item Food Policies totaled $480,272 million, a decrease of 6.2%.

These four items, linked to social policies or spending, They add up to $2,207,326 million versus $2,300,638 million in interest. Only interest payments IMF exceed what was paid by the AUH.

So far this year, the interest rate that Argentina pays to the IMF has risen from 7.12% to 8.16%, making Argentina’s debt even more expensiveraising the total interest bill to more than US$3,200 annually.

The OPC Report indicates that “social benefits ($ 12,116,485 million) showed a negative variation, accumulating a fall of 7.1% in the third quarter of 2023. Reductions are observed in retirements and pensions (-3, 5%), in family allowances (-27.4%) and in social programs (-12.6%). On the other hand, there was an increase in non-contributory pensions (4%).”

In relation to the retirements and pensions, those who did not receive any bonus made a loss very important in the face of inflation, which adds to what they lost in 2020, 2021 and 2022.

According to the OPC, in these first nine months, “the drop in pension spending It was mainly explained by the gap between the updating of salaries adjusted by the mobility formula and inflation. For lower-income retirees, the fall is mitigated by the application of bonuses ($10,000 in January and February, $15,000 between March and June, $17,000 in July, $20,000 in August and $37,000 in September).

Consequently, “discounting the expenses allocated to the payment of the bonds, The drop in spending on retirement and pensions is 7.8% year-on-year. The assets updated only by the mobility formula (not covered by the bonuses) showed a reduction in purchasing power of 13.8% year-on-year to the third quarter of 2023, while minimum assets practically equaled inflation (0.5%).