Argentina primary spending falls in October due to provincial and subsidy cuts

Primary public spending in Argentina decreased by 5.5% in October, driven by significant reductions in transfers to provinces and economic subsidies, according to a report by the consultancy Analytica. This brings the real cumulative decline for the first ten months of the year to 3.3%.

The contraction was largely fueled by a 56.5% year-on-year real drop in transfers to provinces. Economic subsidies also saw a 32.6% real year-on-year decrease, including a 26.2% drop in energy subsidies and a 55.8% reduction in transport subsidies. Additionally, transfers to the energy company CAMMESA fell by 28.5% real, while public works spending declined by 21.4% in real terms.

In the social protection sector, the Universal Child Allowance (AUH) was the only item to show significant real growth, increasing by 2.7% year-on-year. Conversely, other family allowances fell by 0.6% real. Over the first ten months of the year, provincial transfers have seen a cumulative real decrease of 61%, while social programs have declined by 22.7% cumulatively.