2004News

Budget surplus for quasi-fiscal debt

Finance Minister Vicente Bengoa reported that budgetary surpluses will be allotted to pay the internal public debt, or the so called quasi-fiscal debt, as established by Decree 1524-04. The practice in the past was for the President to have discretionary powers over the surplus. Bengoa says that this time around the government has agreed with the IMF on the use of the surplus in order to put a check on government expenditures and investments.

“If there is a surplus, then it must be allotted to pay the public debt; and if there is still money left over, then the President can dispose of it,” he said.

As reported in the Listin, Decree 1424-04 was suggested by the IMF, despite the fact that Law 531 establishes that the Executive Branch can use 75% of the budget surplus at its discretion.

Bengoa highlighted that the past administration doubled the foreign debt and Congress approved foreign debt commitments of US$10 billion.