Government projects 4% growth and 18% inflation in 2027 budget

President Javier Milei and Economy Minister Luis Caputo presented their 2027 budget bill to Congress on Tuesday night. The budget predicts a 4% economic growth rate and 18% inflation for the upcoming year. This represents a decrease in expectations compared to the previous year's budget, which anticipated 5.4% growth.

The government has revised its inflation forecast for 2026, setting it at 29% by December, up from the 10.1% estimated in the prior budget. This is significantly higher than the actual inflation rate, which had reached 21% by August of that year. The economic growth projection for 2026 was also revised downwards, from the initial estimate of 5.4% to the current 4%.

Despite the lower growth expectations, the Milei administration remains optimistic about salary increases. The government anticipates a 25% rise in salaries next year, outpacing the inflation rate. Additionally, the exchange rate is expected to strengthen to AR$1,847.60 per dollar by the end of 2027, a significant improvement from the current rate of AR$1,530 and the previous December 2026 projection of AR$1,423.

The primary goals of the budget bill are a fiscal surplus and zero deficit. Minister Caputo highlighted that this would mark the first time in Argentina's history that the country achieves four consecutive years of fiscal surplus, without defaulting on its debt. The primary surplus is projected to be US$18.44 trillion, or 1.3% of the country's Gross Domestic Product (GDP), while the overall fiscal surplus is expected to be US$3.30 trillion, equal to 0.2% of GDP.

The budget bill also projects exports exceeding US$130 billion and a favorable trade balance in goods and services surpassing US$15 billion. While the Lower House will debate the bill in October, President Milei will not deliver a televised address to announce the budget or explain its contents, marking a departure from previous years.