In pursuit of its objective to uphold the fiscal surplus, Javier Milei’s administration is set to introduce a substantial rise in fares for nationally regulated trains and buses beginning in May, with total increases reaching as high as 90% in the ensuing months. Government officials articulated their objective to transition towards a “more organized, efficient, and sustainable” transportation system, aiming to reduce reliance on state subsidies. The announcement arrives in a challenging environment for Milei, who is currently facing one of the lowest popularity ratings since the onset of his administration. Contributing factors include the escalating cost of living and persistent wage losses that exhibit no indications of recovery. The recent fare increases represent the latest development in the extensive fiscal adjustment being implemented by the government, which also encompasses recent reductions in transfers to provinces and the university education system.
In the context of the Buenos Aires metropolitan region’s train services, the strategy entails a series of incremental adjustments of differing scales: commencing with an 18% increase in May, succeeded by monthly hikes exceeding 10% until September. The government noted that in December 2023, railway fares accounted for merely 2% of operating costs. The remaining 98% was funded by public subsidies. At present, the coverage stands at approximately 5%, with the official forecast targeting a near 10% by September. In the long term, Milei’s administration aims to privatize the railway network, encompassing passenger transportation; however, progress in this regard has yet to materialize. The strategy for nationally regulated buses entails implementing three successive fare increases of 2%, commencing on May 18. The transportation adjustment has been in effect since the onset of Milei’s administration. To illustrate the magnitude, expenditure decreased from constituting 0.49% of GDP in 2023 to merely 0.04% in the cumulative total for the first quarter of 2026.
Data indicates that this represents the lowest level observed in the past two decades. Multiple consulting firms have indicated a persistent decrease in the government’s popularity. Management & Fit identified that escalating prices and utility rates have resurfaced as the primary concern for respondents, with mentions rising to 28.3% in April from the prior 22.8%. Furthermore, the challenge of financial stability reemerged as the primary personal concern for respondents, increasing from 21.6% to 25.2%. Milei’s approval ratings mirrored this decline: disapproval increased from 50.7% in February to 54.3%, whereas approval experienced a more pronounced drop, decreasing from 46.8% to 37.2%. Wage increases persistently trail inflation, a critical aspect given that numerous public transportation fare adjustments are linked to CPI data.
According to the latest report, wage increases “averaged monthly rises of 2.4% in the first four months [compared to official inflation averaging 3%], and for the coming months, major unions have closed negotiations along these lines.” In this context, it was asserted that “the evolution of purchasing power will depend on whether the disinflation process resumes.” Nonetheless, it was estimated that purchasing power decreased by 3.5% in real terms during the initial four months of the year, with projections indicating that for the remainder of 2026, this decline could potentially escalate to as much as 5%.