Argentina Posts Surplus Again as IMF Reviews the Books

Argentina’s fiscal discipline under President Javier Milei has become the most closely watched economic experiment in Latin America. On Wednesday, Economy Minister Luis Caputo reported that the national public sector posted a primary surplus of AR$3.13 trillion ($2.2 billion) in January, rebounding from a seasonal December deficit of AR$2.88 trillion. After subtracting AR$2.02 trillion in net interest payments — January and July carry the year’s heaviest debt service load, with Bonares and Global bond coupons coming due — the financial surplus was AR$1.11 trillion.

The result marks the 14th month of primary surplus in the last 15 under Milei. Full-year 2025 closed with a primary surplus of 1.4% of GDP and a financial surplus of 0.2%, down slightly from 2024’s 1.8% and 0.3% respectively but still remarkable by Argentine standards. Caputo noted it was the first time since 2008 that Argentina achieved two consecutive years of financial surplus, and the first time in the historical series beginning in 1993 that it did so while meeting all public debt service obligations. Since taking office in December 2023, Milei has cut tax burdens by an estimated 2.5% of GDP while maintaining the surplus — a combination he argues proves austerity and growth can coexist.

The IMF test

The January data dropped while an IMF technical mission was in Buenos Aires for the first review of the $20 billion loan program approved in April 2025. The review centered on two pressure points: a reserve accumulation target that Argentina missed at the end of 2025 (by roughly $2.6 billion), and the 2026 fiscal target of a 2.2% primary surplus. Economists are flagging the target as demanding. Tax revenue is softening as the economy decelerates from its post-crisis rebound, and after two years of aggressive cuts — merging ministries, slashing subsidies, reducing the fleet of state agencies — the low-hanging fruit is gone. Milei’s first legislatively approved budget, passed December 26 with $102 billion in spending and 5% GDP growth assumptions, enshrines fiscal balance as law. But a budget projection is not a result. The January surplus suggests the government intends to hit the number. Whether the economy cooperates for the remaining eleven months is a different question.

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