he government Will send a series of Repairs In tax matters you are considering reducing taxes, as you prepare to close the year with purpose surplus The 2026 budget has been met and negotiated with the Conservatives, who are asking for spending to be made more flexible during the budget group It marks its fourth month of real declines.
The target agreed upon with the International Monetary Fund It achieved a primary surplus for this year of 1.6% of GDP, while it was set in the 2026 budget at 1.5%. For next year, the budget set at 1.5% while 2.2% was agreed upon with the IMF.
Although collections will fall this year compared to 2024 by 0.2% in real terms according to LCG. There is an increase in primary spending, the target is not in doubt and so far the government is adding a Primary surplus of 1.4% of GDP through October.
According to an analysis by the Argentine Institute of Financial Analysis (IARAF), Real direct investment fell by 70% in 2024, and in 2025 it will continue to fall to a level 73% lower than in 2023. Energy subsidies will fall by 58% compared to 2023, and the wage bill will fall by 26%.
Retirement and pension funds, the headline item, are set to close in 2025 4% lower in real terms than in 2023 after a 16% decline the previous year. Current transfers to the governorates closed with a decrease of 61% compared to 2023, while capital transfers will do so with a decrease of 94%. The comprehensive allocation for social protection is expected to grow by 70% compared to 2023.
From the ACM, they analyze that while in the first year of a libertarian administration the spending adjustment and primary outcome were due to reductions in social benefits, capital expenditures and economic subsidies, in 2025 primary spending expanded by a real rate of 1.7%.
Impetus was provided by social benefits and transfers to the regions, but continued contraction in economic support and capital expenditure, which remains at historic lows.
As follows
“There are real limits. Today we have no public works, and it is no longer possible to make modifications. The university’s budget was cut in half, spending on salaries was reduced by 35%, and the retirement rate was reduced to less than 10%. The question is, where else can you edit?” He said. Emmanuel Alvarez Agis In El Cronista stream.
With such severe levels of cuts, the question is where the adjustment can extend. to Claudio Caparolo“Director of Analytica,”The election result gave an impetus to the government’s financial commitment. Because he will have to make fewer concessions and because he has more legislators to support his initiatives.”
“There is still a lot to go, both in staff and activities “In terms of the structure within the country, where savings can still be achieved, although it must be recognized that there has been a significant reduction,” he explained. Aldo AbramExecutive Director of the Freedom and Progress Foundation. At this point, the government plans to move forward with new cuts in public employment.
Abram added,All public companies should be privatised, “Whether they make a loss or not, the sooner they lose, the sooner they should be sold at all costs.”
It is among the companies that have been privatized AYSA, Enarsa, Trenes Argentinos, hydroelectric power plants, etc. Many privatizations have already begun, with the many national roads that make up the franchise network topping the list.
Finally, he insisted on the need to lift subsidies on public services, especially for those who can afford to pay for them: “Those of us who pay the full AMBA rate continue to receive support.”. “This has to end.”
Last week, the government announced a change in the system Subsidies For energy, which means saving a billion pesos. So, Spending on this The division will rise to 0.5% of GDP in 2026. According to the UBA Rates and Subsidies Monitor, subsidies are 72% lower than their peak recorded in June 2022.
Caparolo noted,A clue on what to expect for 2026 is found in the commitments made with the IMF. Along these lines, there are changes in power support or in the update of Abu Dhabi In the budget. The main focus is the relationship National Districts, beyond adjustment for non-automatic transfers and public works It is also possible to expect this Changes in the collection process are encouraged to align incentives between national and local government“The economist added.
On this front, expectations are being placed on tax reform that will affect some participating taxes, e.g ProfitsWhile trading it is possible that there will be changes in Value added taxIn addition to encouraging changes in subnational taxation.
At the level of social spending, it was agreed with the International Monetary Fund that the coverage of allocations would reach 95% of the food basket and that program records would be unified. At the end of 2026, it was also agreed to send a pension reform and liberalize the electricity market.
“Looking at 2026, The margin for adjustment appears to be limited in items that are already highly stressed, such as public works and social benefits.While financial efforts are expected to focus on… – Reducing economic subsidies In a new round of Rationalizing the state’s operating spending. “With inflation expected to decline, the adjustment will no longer rely as much on real monetization of expenditures (as in 2024) and will rely more on explicit budget allocation decisions and effective containment of nominal spending,” explained ACM’s Christian Naude.
Reservations
Another doubt that remains is whether the reserves target will be achieved. Today, according to the IMF’s methodology, these countries are $16 billion in negative territory, which puts them $12 billion away from the target agreed upon with the IMF.
The government explained that the accumulation of reserves would occur through re-liquidation of the economy to the extent of increasing demand for money. But official sources confirmed that they are still analyzing the accumulation mechanism.