Due to laws that it could not repeal, the Government will have to adjust $7 billion in other areas to maintain the surplus

The laws on university educational financing and the disability emergency would have a significant impact for the Treasury. fiscal cost of 0.7% of GDP (0.23% for the first case and up to 0.48% in the second). The president Javier Miley He announced this weekend that he will not veto the Budget beyond those laws that the ruling party failed to repeal.

In this way, he acknowledged, the Ministry of Economy should execute a cut in other expenses to comply with the expenditures provided for in those two articles included in the 2026 budget forecast.

Thus, a series of dilemmas are open to the Government: some expenses have already been markedly cut in the first two fiscal years and has less room to continue advancing on them. Transfers to provinces and public works, for example, they are on that list. The subsidiesanother segment that demands a lot of funds from the treasury, would have a more accelerated adjustment next year.

Looking ahead to 2026, different consulting firms and study centers agreed that the fiscal scenario is heading towards a stage of greater “normalization“, after the strong changes registered in 2024 and 2025.

The Argentine Institute of Fiscal Analysis (Iaraf) tested a projection on which areas could be adjusted to cover this extra cost, which this study center calculated at 0.5% of GDP. To reach a conclusion, he observed which items of spending are not inflexible because they are tied to inflation, such as pensions.

According to a criterion by which each expense contributes according to its proportion of weight in the budget, Public salaries would bear the brunt, with 0.19% of GDPmeaning that they would cover about 40% of the necessary cut.

This would be followed by social programs and energy subsidies (0.07 points of GDP each), expenditure on goods and services (0.06 points), transportation subsidies, real direct investment and current transfers would contribute about 0.03 points each.

The Mediterranean Foundation warned that the macroeconomic assumptions included in the draft Budget for 2026 have an optimistic bias. In particular, they highlighted that “both the annual inflation assumption (10.1%) and the real GDP growth assumption (5%) look demanding,” and considered higher inflation and a more moderate economic expansion more likely.

This would have an effect on the fiscal issue: according to the entity’s analysis, higher inflation would allow for greater revenue as planned, although at the same time it would imply more expenses in those items that adjust automatically for prices.

The fiscal key, they stressed, would be in the non-indexed expense management: If this component remains within the budgeted nominal limits, it could even lead to a higher primary surplus.

On this issue, estimates from the Congressional Budget Office (CPO) indicated that About 78.1% of the resources were virtually “untouchable” under the current rules, while the 21.9% remaining —which included social programs, subsidies, transfers to provinces and expenses on goods and services— made up the potential room for adjustment.

From the consulting firm LCG they added that the fiscal challenge will be reinforced by new pressures on income and spending. They indicated that “the reduction of withholdings recently announced will subtract income by 0.1% of GDP”, and that a possible labor reform with a significant reduction in employer contributions could imply an additional reduction of up to 0.54% of the Productpartially compensated—as they noted—by greater creation of formal employment.

To this picture would be added the inertia of spending indexed by mobility, which would add pressure estimated at 0.2% of GDP. In a context in which the Government reiterated its refusal to raise taxes and economic activity shows difficulties in taking off, LCG concluded that The resulting gap between lower income and higher expenses “will demand a new round of fiscal adjustments in 2026”.