By Josefina Martina Pardo
Following the first two years of Javier Milei's administration operating without an approved budget, Chief of Staff Diego Santilli and Economy Minister Luis “Toto” Caputo submitted the nation's quintessential legislative blueprint to the National Congress. The bill was immediately referred to the Budget and Finance Committee, chaired by ruling-party lawmaker Bertie Benegas Lynch.
As emphasized in the bill's executive summary, fiscal balance and ending Treasury financing via monetary issuance have stood as the two fundamental pillars of the economic program since La Libertad Avanza took office, aimed at eradicating what they view as the root cause of inflation.
Under the macroeconomic baseline, the bill projects a 4.0% annual GDP expansion for 2027, a nominal exchange rate reaching $1,847.60 pesos per dollar by December 2027 (+15.5%), and annual inflation decelerating to 18.0% over the same period.
Beyond the administration's macroeconomic projections and expectations, the budget reveals several line items that would lag behind the 2027 estimated inflation rate, such as CONICET (+10.9%). Concurrently, other agencies face outright nominal reductions, including INTI (-5.2%) and INTA (-12.4%).
The 2027 Budget freezes university funding at 2024–2026 levels, coming in 32% below the estimates calculated by the National Interuniversity Council (CIN) to fulfill the University Financing and Faculty Wage Readjustment Law (Law 27,795), which the government currently does not uphold.
Last year, the Executive Branch was forced to concede following the rejection of Chapter XI, which had sought to repeal emergency laws on disability and university financing.
After two failed bids in the 2025 and 2026 budget drafts, Caputo is once again seeking to eliminate the automatic mobility mechanism for child and universal allowances, proposing a system that establishes neither a defined formula nor a minimum frequency for updating benefits.
Yet, alongside austerity measures in social development sectors aimed at safeguarding the fiscal surplus, the breakdown of Central Administration spending by purpose and function reveals a stark contrast: Internal Relations funding—encompassing discretionary financial assistance to subnational governments and National Treasury Contributions (ATNs)—surges by 118.6 percentage points compared to 2026, with current transfers reaching 902.628 billion pesos. By comparison, that same allocation had grown by just 20.7% between 2025 and 2026.
A geographical breakdown of spending indicates that Salta Governor Gustavo Sáenz is projected to receive an increase of more than 40 percentage points over 2026 allocations. Meanwhile, Santa Cruz Governor Claudio Vidal is set to receive an increase of more than 458.584 billion pesos compared to this year, a 53.5% jump. Other provinces registering significant year-over-year gains in current spending include Mendoza (+33.9%), Chubut (+32.3%), Entre Ríos (+29.8%), Tucumán (+29.7%), Misiones (+29.1%), and Córdoba (+28.2%).
With 1,708,816 million pesos earmarked for Internal Relations in 2027, the national government is visibly setting the stage and laying the political groundwork for an upcoming election year.
