Columbia University in the City of New York

Argentine Government

Prospects for this year in terms of fund-raising does not seem to be too positive. Is that from the external sector It is expected a slower pace of increase in fund-raising both by minor delays to exports (due to fall in international prices and smaller quantities exported since for example, soybean production would record a fall in the campaign 2008/09 of 17%) and import duties. With regard to other determinants of the evolution in the fundraising, the expectation of a null growth in economic activity (there are those who predict that Argentine GDP contract), as well as a lower rate of annual inflation (which might be no more than 15%) anticipate a poor performance in the field of fiscal resources. Although revenues from social security product of the reestatizacion of the retirement and pension system partly elongates the fall into the dynamics of fundraising from other sources, another negative effect about the same can be expected through a lower rate of compliance by taxpayers. Is that why the situation in the economy is putting in trouble to many sectors of the same and the families which will increase the backwardness in payment of taxes and even will encourage a greater subdeclaracion of them. This negative picture in terms of fundraising will force the Government to increase efficiency in public spending to keep the surplus that allows you to meet the obligations of the public debt. In this regard have already begun the cuts in the area of subsidies and he is expected to also occur the same with public works. The need to maintain fiscal discipline collides with the economic stimulus plan announced weeks ago by the Argentine Government for which there are no large amount of resources to carry it out. On the other hand, the wage issue imposed the Government a constraint in the public spending cuts since there are pressures of strong increases in the wages of employees in the public sector.

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