Argentina to deepen public‑sector cuts before 2027 election

The Argentine executive has launched a new “integral review” of the state apparatus ahead of the 2027 electoral campaign. Led by the Ministry of Desregulation and State Transformation under Federico Sturzenegger, the review will examine functions, budgets, staff levels and territorial overlap of public bodies to decide which agencies can be eliminated, merged or restructured. Targets include agencies such as Vialidad Nacional, the National Institute of Technology (INTI), the National Institute of Agricultural Technology (INTA), the National Institute of Vitiviniculture and the National Institute of Industrial Property, among others that were previously slated for reform in 2025 but were halted after congressional rejection.

Since December 2023 the government has already cut 71,029 public‑sector positions – about 14 % of the workforce – using non‑renewal of contracts, voluntary retirements and reassignments. Officials say another 10 % of staff could be reduced before the end of the year to meet fiscal targets and IMF‑mandated limits on wages, subsidies and capital spending.

At the same time, transfers from the national treasury to provinces fell sharply, with July 2026 real transfers hitting the lowest level in 20 years – an 87.7 % year‑on‑year drop for non‑automatic funds and a 61.8 % decline for the first half of the year. The contraction deepens fiscal pressure on provincial budgets that rely on these funds for salaries, public services and infrastructure projects.