The government has announced that it has overachieved in its efforts to reduce the primary deficit, with the numbers for 2017 showing that it was 3.9 percent of the Gross Domestic Product (GDP), and considering that the target for 2017 was a deficit equivalent to 4.2 percent of GDP, it seems as though things worked out better as planned.
According to the figures distributed by the government, the 2017 primary deficit was 0.4 percent smaller than 2016. Furthermore, the government emphasized that the result was possible because “in 2017, and for the first time since 2004, spending increased less than revenue did. While revenue increased by 22.6 percent (or 28.1 percent if the contributions from the tax amnesty are excluded), primary spending increased only by 21.8 percent.”
Spending fell as a percentage of GDP for the first time in two decades (down by 1.1 percentage points compared to 2016) whereas in real terms, the government is estimating that the cutbacks amounted to 3.1 percent in comparison to 2016. The Treasury Ministry has announced that 2017 marks the second consecutive years that spending came down in real terms, after 12 previous years in which it grew by an average 8.4 percent a year.
For 2018 the government is aiming for a primary deficit of 3.2 percent of GDP, 2.2 percent by 2019 and 1.2 percent in 2020.
If you want to know more, you can watch the conference here (FYI, feel free to skip the first 10 minutes of people just walking by, which for some reason where left unedited).