Argentina reduces 2021 budget deficit to half

Argentina sharply reduced its budget deficit in 2021 as President Alberto Fernández tries to cut down on spending amid talks with the International Monetary Fund.

The so-called primary deficit, which excludes interest payments, fell to three percent of gross domestic product from 6.5 percent in 2020. The figure, boosted by proceeds from a wealth tax, was also below the Economy Ministry’s estimate for a 3.5 percent gap.

Economy Minister Martín Guzmán says he wants to eliminate primary fiscal deficits by 2027 as part of a deal to refinance about US$40 billion owed to the IMF. The Washington-based lender, meanwhile, says it needs to see an economic plan that lays out how that target would be met and how inflation and capital outflows would be reduced.

Argentina expects a primary deficit of 3.3 percent this year, according to estimates in its proposed budget for 2022.

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