Government agrees with Buenos Aires to include debt payment in 2026 budget

The Argentine government has reached an agreement with the Autonomous City of Buenos Aires to include the payment of coparticipation debt in the 2026 Budget. This decision is expected to be part of the project that has already received a report in committee.

The agreement between the national government and the Autonomous City of Buenos Aires (CABA) represents progress in resolving the coparticipation debt. Reports indicate that this measure will be incorporated into the 2026 Budget project, which has already been favorably reported in the relevant committee of the Lower House. The negotiations, though not detailed extensively, reflect efforts to align finances between the central government and the capital. This step aims to regularize pending payments from the federal fund distribution, a recurring issue in Argentina's inter-jurisdictional relations. Exact amounts or implementation timelines are not specified in the available information, but the consensus points to prompt inclusion in the budget framework.

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Tense Chamber of Deputies session debating 2026 Budget, with opposition protesting cuts amid government economic projections.
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Deputies debate 2026 Budget in tense session

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The Chamber of Deputies began a tense session to debate the 2026 Budget, where the officialism achieved quorum and bets on a chapter-by-chapter vote. The opposition criticizes cuts in education, health, and disability, while defending derogations of recent laws. The Government projects 10.4% inflation and 5% GDP growth.

The Ministry of Finance and municipal representatives have agreed on a 7.8% adjustment in transfers from the General Participation System (SGP) for the first twelfth of 2026, following a reduction in the last period of 2025. The meetings also reviewed technical models for fund distribution throughout the rest of the year.

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Argentina's Senate will convene this Friday to approve the 2026 Budget, with secured support for general approval but resistance to Article 30, which eliminates funding targets for education and science. The ruling party aims to pass it unchanged after lower house approval, while negotiating with allies to protect the controversial provisions. Javier Milei's government views this law as essential for its fiscal roadmap and signals to international markets.

Building on the Senate committee's recent dictamen approval excluding a controversial Deputies-rejected chapter, Patricia Bullrich is urgently mending ties with PRO, UCR, and governors upset over exclusive deals, ahead of the December 26 session on the 2026 Budget and Fiscal Innocence Law.

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Argentina's Central Bank announced on Monday, December 15, 2025, the first measures of its 2026 economic plan, including updating exchange rate bands according to inflation and a consistent program to accumulate international reserves. The International Monetary Fund (IMF) welcomed these decisions, aligned with its prior recommendations. Meanwhile, the National Treasury purchased 320 million dollars following the announcements.

Building on the December 22 cabinet meeting at Olivos where these were prioritized, Javier Milei's government secures approval of the 2026 Budget and enacts the Fiscal Innocence Law. These milestones ensure fiscal discipline amid IMF demands but face criticism over impacts on vulnerable groups like the disabled and public workers. Analysts hail macroeconomic gains while cautioning on social costs for 2026.

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Finance Minister Nicolás Grau submitted to Congress a public sector adjustment bill that sets a record with 129 articles, including a controversial tying norm and various miscellaneous initiatives. The proposal draws opposition criticism for its length, lack of funding, and measures that could bind the incoming government. The estimated fiscal cost for 2026 is US$1.775 million.

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