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

President Javier Milei and Economy Minister Luis Caputo introduced their 2027 budget bill to Congress on Tuesday night. The document anticipates an inflation rate of 18% and an economic growth rate of 4% for the upcoming fiscal period, indicating a decrease in the government's expectations compared to previous projections. In 2026, the budget had predicted a significantly lower inflation rate of 10.1%, much lower than the actual rate, which had already surpassed 21% by August.

The 2027 budget also adjusts the estimated inflation for this year, projecting it to reach 29% by December. Economic growth has also been revised downward; while the 2026 budget projected a growth rate of 5.4%, actual growth in the first half of 2026 was only 1.9%, primarily driven by agroindustry, mining, and fishing sectors. Other sectors, such as industry, commerce, and investment, experienced year-on-year declines.

However, the government remains optimistic about salaries, anticipating a 25% increase next year, outpacing price increases. Furthermore, the Milei administration forecasts the exchange rate to reach AR$1,847.60 per US dollar by the end of 2027, up from AR$1,530 currently, which was initially expected by December 2026. The budget bill sets the primary goals of achieving a fiscal surplus and maintaining a zero deficit.

Minister Caputo highlighted that this will be the first time in the country's history that four consecutive years of fiscal surplus will be recorded, with no default on debt. The bill aims to achieve a primary surplus of US$18.44 trillion, or 1.3% of GDP, and a fiscal surplus of US$3.30 trillion, or 0.2% of GDP, after accounting for debt interest payments.

The government also expects exports to exceed US$130 billion and a favorable trade balance in goods and services exceeding US$15 billion. The bill was filed in the Lower House on Tuesday evening, meeting the September 15 deadline for the executive branch to present the budget annually. Unlike previous years, President Milei will not deliver a televised national address to announce the budget bill or explain its contents to legislators, and Minister Caputo will not present the document to Congress, as is customary.

Nevertheless, other officials from the Economy Ministry are expected to defend the bill in Parliament. Debate within the Lower House is anticipated to commence in the first week of October, with a specific date for the bill's passage still to be determined. The ruling party La Libertad Avanza will now need to negotiate with allies, governors, and the opposition to garner support for the bill, potentially making concessions along the way.

The 2026 budget bill was the first one approved under the current administration, as opposed to Milei's previous practice of updating the 2023 budget on an ad hoc basis.