BUENOS AIRES, June 7 Argentina's primary public
spending will fall in real terms in the fourth quarter of this
year, following the government's goal of keeping real spending
flat year-over-year, a Treasury Ministry official told reporters
Sebastian Galiani, secretary for economic policy, said real
spending so far this year has been slightly above last year's
levels because public spending grew sharply in the fourth
quarter of last year as the government invested heavily in
public works and stimulus to help exit a "strong recession."
"In the fourth quarter real inter-annual spending will be
negative, not because anything special will be done in the
fourth quarter but because spending was very high in the fourth
quarter of last year," Galiani said. "This year's spending is
very regular, last year's spending was very irregular."
Since taking office in December 2015, center-right President
Mauricio Macri has sought to close the fiscal deficit he
inherited from free-spending populist Cristina Fernandez. The
Treasury is targeting a fiscal deficit of 4.2 percent of GDP in
2017 and 3.2 percent of GDP next year.
In the year through April, primary spending grew 36 percent
in nominal terms, while revenues grew 40 percent. Most of that
is explained by high inflation, which totaled 40.9 percent in
2016 and is seen exceeding 21 percent this year.
Primary spending increased 1.8 percent in real terms -
taking inflation into account - in the first four months of 2017
compared with the same period last year, J.P Morgan said in a
May 29 note.
Galiani added that the government would beat its quarterly
fiscal goals for a cumulative fiscal deficit of 2.0 percent of
GDP in the second quarter and 3.2 percent in the third quarter.
(Reporting by Luc Cohen; editing by Diane Craft)