Argentina seeks to preserve fiscal surplus with spending cuts and tax measures

The Argentine government, led by President Javier Milei, introduced a series of steps aimed at maintaining the primary fiscal surplus that underpins its economic program. Economy Minister Luis Caputo stressed the need to boost tax collection, stating, “Para eso tenés que recaudar más porque seguir generando superávit vía ajuste ya es muy difícil.”

Key measures include postponing the Labor Assistance Fund (FAL) until 1 November, saving an estimated 0.15 % of GDP, and transferring Letras Capitalizables worth 580 billion pesos (about 0.05 % of GDP) to the health insurer PAMI. Tax receipts in May rose due to corporate income tax filings, but value‑added tax and other activity‑linked taxes continued to fall.

The International Monetary Fund warns of fiscal pressures in 2026 from new university‑funding and disability‑emergency laws, each projected to cost around 0.15‑0.20 % of GDP. Recent reductions in agricultural retentions and some internal taxes have a limited impact, totaling less than 0.1 % of GDP. Facimex forecasts a primary surplus of 1.3 % of GDP for 2024, while the IMF target remains near 1.4 % and its 2026 estimate has been lowered to 1.5 % of GDP.