The government’s economic estimates for inflation, the dollar-peso exchange rate, and economic activity were the most anticipated in the 2027 budget. First, it should be noted that the economy ministry’s projections are more optimistic than those of market analysts. This disparity is most noticeable when it comes to economic growth, where there is a difference of over 1%. The 2027 budget presents revised projections for the conclusion of this year’s economic variables, revealing a notable discrepancy between the government’s initial estimates and the present condition of these indicators. This is evident in inflation – which is currently close to three times what was projected last year – and growth, which has been slashed to a third of what was estimated for 2026. In the budget presented at the conclusion of 2025 for the current year, the government projected that annual inflation for 2026 would attain a rate of 10.1%. However, from January through August, inflation has already accumulated to 21.3%. Consequently, in the 2027 budget, the full-year inflation estimate for this year was adjusted to an annual rate of 29%. The figure is slightly below the 30% estimated by experts surveyed in the Market Expectations Survey, conducted monthly by the Central Bank.
For 2027, the economy ministry anticipates that inflation will conclude the year at 18% year-on-year. A comparable trend is observable in the forecasts for exchange rates. Last year, the Milei administration projected that the U.S. dollar would conclude the year at AR$1,423 per dollar. It now anticipates the currency to conclude the year at approximately AR$1,600, in contrast to its present level of AR$1,513. The REM anticipates that it will reach AR$1,630 by December. According to the 2027 budget, the official exchange rate is projected to reach AR$1,847.6 in December of next year. The most formidable challenge, however, resides in economic activity. Last year, the economic team led by Luis Caputo projected a 5% growth for the economy in 2026. INDEC’s preliminary estimate for the first half of this year indicates a year-on-year growth of 1.9%. Looking ahead to 2027, the government has adjusted its forecasts, anticipating a growth rate of 3% for the year.
Nonetheless, it continues to exhibit a significantly more optimistic outlook compared to the 2.1% growth projected by the REM. The official figure for economic activity in the second quarter of this year, which INDEC will release this Thursday, will incorporate more precise estimates of GDP. This will offer a more precise understanding of the economic trajectory in the first half of the year. Projected GDP growth for the upcoming year stands at 4%. However, certain other projections seem to be more robust. The most significant aspect is the estimate for this year’s fiscal result. In 2025, the government projected that the year would conclude with a primary fiscal surplus – that is, prior to considering debt payments – amounting to 1.5% of GDP. In its latest budget proposal, the estimate indicates a surplus of 1.3%.
Although this aligns broadly with the government’s prior estimate, it falls short by one-tenth of a percentage point compared to the 1.4% target established in the latest review with the International Monetary Fund. The divergence in most variables between projections made a year apart raises questions about the accuracy of the assumptions employed by the libertarian administration in calculating its projections for the upcoming year. This is particularly relevant as presidential elections are scheduled for November 2027, which could heighten the risk of economic volatility.
