Argentina's government projects 4% growth and 18% inflation for 2027

Argentina's government forecasts a modest 4% expansion in gross domestic product (GDP) for 2027, alongside a projected 18% inflation rate. This economic outlook was released on Tuesday by President Javier Milei's administration, just prior to the close of his presidential term. Milei has already declared his intention to run for re-election, aiming for a second four-year term in office.

These projections are outlined in the 2027 Budget bill, which the government plans to present to Congress, according to the Economy Ministry.

Since assuming power in December 2023, Milei has pursued a series of austere economic policies, resulting in positive changes to Argentina's macroeconomic indicators. Inflation has plummeted from staggering levels, falling to 33.5% year-on-year in August, reflecting the impact of these measures. The government has also achieved fiscal surpluses for two straight years, a first since 2008, although these gains have come at a price.

Public spending has been slashed, state agencies shuttered, tens of thousands of jobs lost, and the purchasing power of wages and pensions significantly eroded.

In addition to GDP and inflation forecasts, the government anticipates a 25.4% increase in average wages during 2027, outpacing the projected inflation. The exchange rate is also forecast to average 1,728 pesos per US dollar. The Budget bill reaffirms the government's commitment to a positive fiscal outcome, marking the first instance in Argentina's history of four consecutive years of financial balance surpluses, without defaulting on its obligations.

Economy Minister Luis Caputo unveiled the main budget guidelines at a Mesa Política meeting on Tuesday.

The government's GDP projections are more optimistic than the World Bank's latest estimate, which revised down its growth forecast for Argentina from 4.1% to 3.7% in its June Global Economic Prospects report. The administration also expects a trade surplus of $15.56 billion, calculated on the basis of exports totaling $133.98 billion and imports of $118.42 billion.

The 2026 Budget, Milei's initial fiscal plan since taking office, marked a shift from his predecessor Alberto Fernández's approach. Under the Milei administration's first budget, inflation was projected at 10.1%, although the actual figure rose to 21.3% in cumulative terms during the first eight months of the year. Most estimates now predict GDP growth for 2026 to hover between 3% and 3.5%.