Argentina Passes Milei’s First Budget, Betting on Low Inflation and Fiscal Surplus

Key Points

• Congress passed the first Milei-written budget, replacing two years of rolled-over spending authority.
• The plan bets on 10.1% inflation, 5% growth, and a 1.2% of GDP primary surplus in 2026.
• A late fight over scrapping legally protected funding floors, especially for science and technology, showed where resistance still sits.

After an extended session on Friday, December 26, Argentina’s Senate passed the 2026 budget 46–25, with one abstention.

The Chamber of Deputies had already approved it, and senators sent it forward without changing a word.

It is the first budget written by Javier Milei’s administration to become law since he took office in December 2023.

That ends a messy workaround. Argentina had run the prior two fiscal years on “reconduced” budgets—old authorizations carried forward while inflation rewrote real spending power.

The state kept operating, but planning shrank and execution turned into a rolling negotiation.

The economic assumptions are the real headline. The government projects 10.1% inflation in 2026—implying average monthly increases below 1%—and 5% economic growth. It targets a primary fiscal surplus of 1.2% of GDP.

Published summaries of the plan cite total spending near 148 trillion pesos (about $102 billion), an end-2026 exchange rate around 1,423 pesos per $1, and trade forecasts that point to exports rising 10.6% and imports 11%.

For readers abroad, those numbers matter because they frame Argentina’s credibility with investors, suppliers, and neighbors.

Argentina Passes Milei’s First Budget, Betting on Low Inflation and Fiscal Surplus

If inflation really drops into low double digits, contracts, wages, and pricing can de-index, and capital can plan.

If it doesn’t, the budget still matters because it sets priorities under stress—and shows how far the government will go to defend balance.

The fiercest debate centered on Article 30, which removes legal minimum investment floors tied to GDP, notably for science and technology.

Critics warned the change weakens long-term commitments. The government argued rigid formulas collide with its fiscal rule, which Milei has called non-negotiable.

Now the test shifts from votes to execution.