Argentina budget proposal targets US$800 million subsidy cut

The Argentine government's 2027 budget proposal includes a projected US$800 million reduction in subsidies for energy and transportation. According to estimates from the University of Buenos Aires (IIEP) and Conicet, total subsidies are expected to drop from approximately US$5.2 billion in 2026 to US$4.4 billion in 2027.

Under this plan, users would cover a larger portion of service costs. For electricity, residential users without subsidies would be expected to cover 94.62% of generation costs, while the 8.8 million users currently under the Focused Energy Subsidy regime would see their coverage increase from roughly 25% to 64.27% of costs.

In the transportation sector, spending is projected to decrease from 0.19% to 0.16% of GDP. This represents a real reduction in resources of approximately 9% for trains and 26.4% for buses. For gas, the scheme proposes reducing wholesale price assistance for network users while increasing targeted aid for specific households and cylinder users.