2026/02/18 | Diego Ciongo & Soledad Castagna
Argentina recorded another fiscal surplus at the beginning of the year. The primary surplus reached 0.3% of GDP, while the nominal fiscal surplus, including debt interest payments, was 0.1% of GDP. These figures were similar to those from January 2025. However, this year included extraordinary revenues from the sale of hydroelectric power plant shares for 0.1% of GDP.
Soft real tax revenues. Total real revenues fell by 5.7% YoY in the quarter ended in January after a 6.4% decline in 4Q25. Tax collection dropped by 8.2% YoY in real terms during the period, following a 7.3% decrease in 4Q25. The weak performance in tax collection was still affected by a drop in export duties due to their temporary suspension in 4Q25, along with a decline in VAT and income tax, likely due to soft consumption.
Primary expenditures declined at the start of the year. Primary expenditures fell by 3.7% YoY in real terms during the quarter ended in January, following a 3.9% YoY decrease in 4Q25. Payrolls decreased by 13.3% YoY (-12.3% in 4Q25) affected by higher inflation at the margin, while transfers to provinces fell by 3.4% YoY (-21.4% in 4Q25). Furthermore, capital expenditure decreased by 7.2% YoY, after falling 2.4% in 4Q25. On the other hand, energy subsidies rose by 27.7% YoY in real terms, compared with a drop of 5.3% in 4Q25, while pension payouts rose by 4.5% YoY in real terms (+6.1% in 4Q25) also affected by higher inflation at the margin.
Our Take: Our 2026 primary surplus forecast stands at 1.5% of GDP, in line with the official forecast presented in the 2026 Budget, which was approved in extraordinary sessions by Congress at the end of 2025. This forecast is supported by disciplined fiscal management.