An Editorial from El Diario, graph below is from Pagina Siete:
There should be serious concern in the economic authorities for the fact that our country has, ostensibly, surpassed the amount of the fiscal deficit that implies -8.1 percent, followed by Brazil with -7.1 percent; Argentina with -5 percent and Uruguay and Colombia reach a figure of -2.9 percent in the previous year, according to studies by the Millennium Foundation, whose analysts almost usually draw conclusions that reflect realities and that, in some way, could help to correct anomalies that occur in the economic field for reasons that each country knows. Unfortunately, the necessary measures are not always taken to have realistic indexes.
It is a fact that our country can not avoid difficult situations that have arisen due to the low prices of gas – the main raw material we export – and, also, because we have had to reduce the amounts committed to both Argentina and Brazil; however, of this reality, the General Budget of the Nation 2019 registered a deficit of 6.98 percent, but in the last one that has been presented, this deficit rose to 7.8 percent.
The problem lies simply in that there is no acceptance of reality and the mistake of spending more when lower income is perceived is still committed; this way of managing the economy contrasts with what happened in other countries, which have managed to overcome the deficits they faced because they have kept to the reality they lived. Millenium states: “We can not stop worrying about what happens with our fiscal accounts, which in recent years have been neglected, because having a fiscal deficit of more than 3 percent of GDP is worrisome, but in addition, it can be a factor of important risk”.
The studies add: “The national, regional and international context can unbalance the economy leaving the country in a very disadvantageous situation. If the Budget is observed for 2019, there is no indication of fiscal prudence and, on the contrary, it seeks to keep high both the expenditure and the deficit, the latter with 7.8 percent of GDP. Adjusting public accounts is imperative” (ED 6/11/19).
The results of our economic situation are serious and to pretend that “they are exaggerations” is a way to enter periods of self-deception very harmful for all. What corresponds in any case is to face reality and observe, in fact, three ways: Save and be austere, promote more production and open the floodgates of exports and avoid more spending, paying attention to what little we have and that there is no possibility to increase. Failure to adopt serious, drastic and responsible measures is to lead the country to a situation that could be described as catastrophic in the future.
Finally, we must agree that we can not and should not live on the basis of loans that raise the amounts of our external debt, nor use the Net International Reserves and continue with the mania of raising the deficit without regard for tomorrow. There is a serious responsibility to face the future.