The provinces loosened the adjustment and increased public spending: six governors started the year with a deficit

The deterioration in provincial public accounts is explained by an increase in spending on budget items such as salaries of public employees, pensions from provincial funds, services or debt interest, as measured by the consulting firm Politikón Chaco, specialized in provincial finances.

Governors’ spending, in general terms, thus grew 2.1% when considering all the provinces and the City of Buenos Aires. 93% of the increase in spending is explained by salaries and debt interest, they estimated.

When analyzing for each jurisdiction beyond the average number, there are opposite realities: Santa Fe increased its spending 16,1%with a lot of difference from the others. They followed him Santiago del Estero (8.8%), Neuquén (7.8%), San Juan (5.7%) and Córdoba (5.2%). In the case of Santa Fe, Politikón considered that these were “increases in personnel spending, transfers and capital spending.”

From the province he governs Maximiliano Pullaro They explained that the results of the first quarter “it is not representative” of the Santa Fe fiscal trend throughout the year and that the first semester the public accounts closed with a surplus of about $40 billion and that this first quarter deficit was explained “by capital spending financed with part of the debt taken out in December.” Santa Fe issued $800 million on Wall Street at the end of last year.

Other provinces maintained the spending with short rein and they applied adjustments during the first quarter of the year. They signed up there Chaco (-13.4%), Misiones (-13%), La Rioja (-11.5%) and San Luis (-10.2%). “In these cases, spending on personnel, transfers and consumer goods explained most of the decrease in spending,” the consultant continued.

While on average spending increased, revenue fell 3.1% in real terms. Put in other terms, the provinces received almost 1.2 billion pesos less than a year ago. The pruning of transfers by the Casa Rosada explains 97% of the decrease in income from provincial coffers.

This combination of more expenses and less income gave rise to the lowest financial fiscal result – that is, accounting for debt interest – since 2012, according to Politikón and Empiria, the consulting firm that runs Hernan Lacunza. It was from 0.2% of the Gross Producthalf that of a year before and much less than the almost 1% of GDP recorded in 2024.

The deficit is not a rarity in recent years among the provinces. Without going any further, in the accumulated of 2025, the group of governorates ended the year in fiscal red, of 0.3% of GDP. It is less common for there to be a fiscal deterioration in the first part of the year, which is usually seasonally more favorable to the governors’ coffers.

“At a consolidated level there is volatility in green and red years; the issue with the first quarter of this year is that historically they have surpluses because it is usually the least demanding period in terms of spending. “This 2026 was very weak”he mentioned Alejandro Pegorarodirector of Politikón Chaco.

The ranking of the provinces with the largest financial surplus in the first quarter of the year was led by the City of Buenos Aires (22% in relation to its total income), Jujuy (20.7%), San Luis (17.2%), Mendoza (12.3%) and Córdoba (12.1%).

On the contrary, there were six that started 2026 with fiscal imbalances: Santa Fe (-22.2%), Tierra del Fuego (-14.2%), Tucumán (-9.3%), Santa Cruz (-5.5%), San Juan (-4.5%) and Buenos Aires (-3.9%). Without counting debt interest, the province governed by Axel Kicillof goes from negative to primary surplus, for 1.7% of its income.

2025 was a year of deterioration for the governors’ fiscal accounts. At the end of that year, fourteen provinces ended up with a financial deficit. A year before there were only six. In recent months the Nation activated a emergency assistance mechanism through co-participation advances. Córdoba, Santa Fe, Jujuy and Entre Ríos have already requested it.