The ranking of the historic fall in discretionary transfers to the provinces: the location of San Juan

The ranking of the historic fall in discretionary transfers to the provinces: the location of San Juan
The ranking of the historic fall in discretionary transfers to the provinces: the location of San Juan

Non-automatic national transfers to the provinces, also called “discretionary”, suffered a marked decrease in April, when they received $68.16 billion. This amount represents a reduction of 28.8% in nominal terms and a drop of 81.9% in real terms compared to the same month in 2023. Specifically in the case of San Juan, the decreases meant 94.1% in the nominal and 99.65 in the real

In turn, if the accrued expense is considered, the nominal decrease reaches 56.7% and the real decrease reaches 88.9%. This emerges from a report by the Argentine Institute of Fiscal Analysis (IARAF), chaired by the economist and consultant, Nadin Argañaraz, based on data from the Ministry of Economy.

According to the document, all jurisdictions experienced a real year-on-year decrease in spending financed by the National State. Of the 24 existing ones (23 provinces and the Autonomous City of Buenos Aires), in half the reduction compared to last year exceeds 95%. In Salta and Entre Ríos, this figure reaches 99%.

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On the other hand, the least significant declines in this aspect were recorded in CABA, Santa Cruz and Misiones, with falls of 29.2%, 61.7%, and 64.2%, respectively. San Juan occupies 12th place among the 24 jurisdictions, with 94.1%, although much closer to Salta and Entre Ríos than CABA and Santa Cruz

Regarding real accrued spending, the jurisdictions with the best performance, although also with red numbers, were CABA (-27.9%), Misiones (-77.1%) and Santa Fe (-85.9%).

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In contrast, the most affected in this regard were Entre Ríos and Córdoba, with a decrease of 99.9%, followed by Chubut, La Pampa and La Rioja, the latter with a drop of 99.8%.

Here, San Juan is ranked 18th in the ranking of the 24 jurisdictions, although much closer to the lower limit, with just 0.3% difference.

How much have transfers to the provinces fallen so far in 2024?

Regarding the balance of the first four months of the year, the negative trend persists: all provinces experienced a real decrease in funds transferred from the Executive.

So far in 2024, the expense paid totals $144,438 million, according to the IARAF report, reflecting a nominal decrease of 37.6% compared to the same period in 2023, and a reduction of 84.1% in real terms. .

Eight of the 24 Argentine jurisdictions experienced a year-on-year decrease of more than 95%, with special emphasis on the cases of La Pampa, San Luis, La Rioja and Córdoba, where the reduction exceeds 98%.

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Regarding real accrued spending, the provinces with the best performance were Santa Cruz (-30.6%), CABA (-31.4%) and Chubut (-65.7%).

While, leading the podium of those that suffered the greatest declines, was the province governed by Ricardo Quintela, with a negative variation of 97.3% year after year.

What are discretionary transfers?

Discretionary transfers are, in their definition, those that the National State grants to the provinces without there being a law that regulates their distribution, these being framed in political decisions, according to the government in power, for assistance to provinces and municipalities, or in investments of a special nature.

In turn, these funds are used for a variety of programs, including those related to the operation of hospitals, as is the case of Garrahan, as well as for initiatives in the educational field, socio-educational policies and projects for the development and supply of nuclear energy. , in other aspects.

Cuts in non-automatic transfers, that is, those that do not arise from laws that determine a specific percentage of a national tax or several of them to be distributed to the provinces, are one of the main components of the fiscal adjustment implemented by the government by Javier Milei in recent months.
“If we update it to today’s value, last year the National State spent 5.4 billion pesos in transfers to the provinces,” stated the libertarian at the opening of ordinary sessions, held on March 1, where he highlighted this as one of the key aspects of the reduction in State spending, which led to a financial surplus of 0.2% of GDP in the first quarter of the year.

“This result arose from eliminating public works, reducing 98% of transfers to the provinces, reducing ministries by half, firing ghost public employees, eliminating social plans for people who did not need them, ending the intermediaries of poverty and reduce the fleet of cars, advisors and cell phones to a minimum. That is to say, although there has been liquefaction, there has been much more of a chainsaw, all for politics,” said the president in Congress.

 
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