President Javier Milei’s administration anticipates a four percent growth in Argentina’s gross domestic product for the upcoming year, while projecting inflation to hit 18 percent. The Executive unveiled its forecasts on Tuesday, marking a significant moment as the final year of the president’s term approaches. Milei has formally declared his intention to pursue re-election for an additional four-year term. The figures are included in the 2027 Budget bill that the government will submit to Congress, as stated by the Economy Ministry. Since taking office in December 2023, Milei has enacted extensive austerity measures that have resulted in enhancements to the nation’s macroeconomic indicators.
Inflation has decreased from triple-digit figures to 33.5 percent year-on-year in August, and the government has achieved fiscal surpluses for two consecutive years – a notable occurrence not seen since 2008. However, these measures have resulted in significant reductions in public expenditure, the shutdown of government agencies, the loss of tens of thousands of jobs, and a notable decrease in the purchasing power of both wages and pensions. In addition to its GDP and inflation forecasts, the government anticipates that average wages will increase by 25.4 percent in 2027, surpassing the expected inflation rate, while the exchange rate is projected to average 1,728 pesos per US dollar.
“The Budget bill once again provides for a positive fiscal result and it will be the first time in our history that we have four consecutive years of surpluses in the financial balance, without the country being in default,” the Presidency said in a statement. Fiscal balance is a “non-negotiable” aspect of Milei’s economic policy, it added. Economy Minister Luis Caputo outlined the principal budgetary directives during a session of the government’s Mesa Política on Tuesday. The government’s GDP projections are more optimistic than those of the World Bank, which in June revised down its growth forecast for the South American economy from 4.1 percent to 3.7 percent in its Global Economic Prospects report.
The government also projects a trade surplus of US$15.56 billion, based on exports of US$133.98 billion and imports of US$118.42 billion. The 2026 Budget marks Milei’s inaugural fiscal plan following his assumption of office, during which he managed the initial two years by perpetuating the expenditure provisions sanctioned by his Peronist predecessor, Alberto Fernández. The 2026 Budget anticipates an inflation rate of 10.1 percent, despite cumulative inflation hitting 21.3 percent in the initial eight months of the year. The Milei administration also projected GDP growth of five percent this year; however, most estimates now place growth between 3 percent and 3.5 percent.
