In September, the financial deficit of the Central Government came to ¢1.55 trillion (millions of millions), more than ¢237 billion above the figure in 2017, according to the most recent data published by the Ministry of Finance on its website.
In comparative terms, this year’s figure is equivalent to 4.5% of the gross domestic product (GDP), greater than 4% a year earlier. The primary deficit was 1.9% of GDP; 0.3% more than in 2017. This result maintains the trend observed since July, when the largest financial deficit of the last five years was reached.
When the results of the central government’s revenues and expenditures were released in the third quarter, Finance Minister Rocío Aguilar emphasized that these results, together with the scarce resources to address the priorities of the State, the announcement of the next qualification review of country risk, the poverty index released this week, the increase in the delinquency of the financial system; among other factors, are clear evidence that the country can no longer cope with the difficult fiscal situation, given the absence of a law to strengthen the Public Treasury to open the way to solve it.
This behavior is a reflection of both a fall in income and an increase in spending.
Another item that showed a significant increase was the payment of interest, which went from 2.4% of GDP, in September 2017, to 2.6% of GDP in the same month of 2018.
Although with a growth rate lower than in 2017, the growth of current expenses (main component of total expenses) reached 7.3%, despite the actions of the government to contain spending.
This increase is equivalent to ¢317.6 billion and is explained, above all, by the increase of 7.9% (¢143.3 billion, approximately) in transfers, which represents 45.1% of that increase. Also, interest increased 13.2% and remunerations 4.4%.
On the other hand, the Central Government’s current income accumulated to September registered its lowest growth since the last five years.
According to the Treasury, although tax revenues showed a slight growth, their pace is much slower than the previous year. This as a result of the decrease vehicle imports, which affects the selective consumption tax; a smaller increase in the collection of sales tax, and the continuous disconnection between economic growth and tax collection.