Argentina's provinces grapple with rising deficits and mounting debt

The province of Chubut faces a widening fiscal gap as oil royalties—accounting for about 15‑16% of its revenue—shrink following a drop in crude prices from $117 to around $70 per barrel. Rigid public spending and a slowdown in the Gulf San Jorge basin have driven the deficit upward, prompting concerns over debt repayment despite ample time to service existing obligations.

In Santa Fe, officials warn of a deficit nearing 596 billion pesos in early 2026, with the provincial government having borrowed $1.1 billion—$800 million of it on Wall Street—the most debt in its history. Interest costs are projected at $67 million annually, while borrowed funds have been directed to highway projects, the 2026 South American Games, and increased taxes that outpace inflation.

Provincial authorities also highlighted broader transparency and financing efforts. Minister Belén Elmiger presented a detailed half‑year report to deputies, emphasizing public access to information and ongoing discussions about a Strategic Financing Law that would allow provinces such as Santa Cruz and Neuquén to secure foreign‑currency credit to fund development projects.