El Salvador: $925 million Shortfall in 2018 Budget

Requesting more loans or issuing bonds are the options under consideration by the Ministry of Finance in order to raise funds needed to cover the 2018 budget deficit.

Wednesday, September 20, 2017

On top of the funds that the Sánchez Cerén administration needs to finish 2017, there is also a shortfall to cover the budget for the next year. The funds needed are for the propane gas subsidy and for servicing debt related to the Preliminary Investment Certificate (CIP by its initials in Spanish). It is estimated that the shortfall is at least $925 million, according to explanations given by the Minister of Finance, Carlos Cáceres.

Laprensagrafica.com reports that "...For this reason, the Government is open to analyzing financing options such as loans or bridge bonds. The official has said that public finance deficit is more noticeable today due to difficulties that the government has been facing for the last two years in financing it, partly because of restrictions imposed by parliament.

"... But the Treasury also needs $260 million to finish 2017. Yesterday, Cáceres acknowledged that there have been delays in the payment of the propane subsidy due to "cash flow problems ... What has happened is that the price of gas has risen, therefore the government made the decision not to punish the population by increasing the price," said the minister."


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El Salvador: 2011 Budget is Not Enough

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Over $350 million has been spent this year that was not included in the initial budget.

Increased costs and reduced government revenues have resulted in a delicate financial situation, which is embodied by a growing fiscal deficit.

This situation has led the Ministry of Finance to recognize that there is $350 million that was spent this year on subsidies such as gas and electricity, which were not budgeted for and for which no resources are available.

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The government estimates spending $426 million in grants this year.

Expenditures made by the government by way of state subsidies, such as transfers to energy consumers using less than 99 kilowatt hours per month, are complicating the state of public finances.

While in 2010 $371 million was spent in grants, in 2011 the government estimates that this figure will increase to $55 million.

El Salvador: 2011 Budget is $4.5 Billion

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Total 2011 budget is $ 4,503.5 million which includes payment of $653.5 million in Eurobonds due in 2011.

Fiscal policy objectives set for fiscal year 2011 are as follows:

Increasing tax revenues by raising tax burden from 14.0% to 14.7% of GDP in 2011, implementing measures aimed at strengthening legal frameworks and the efficiency of the tax system in order to combat tax evasion and smuggling.

El Salvador 2010 Budget: $3.7 Billion

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Even though last year's budget also summed $3.7 billion, this time there is an additional $400 million from the extraordinaire budget, which includes the so-called 'anti-crisis plan'.

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