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.

Javier Milei's government will authorize coparticipation fund advances to 12 provinces facing fiscal difficulties via decree, at a rate close to 15%. The measure addresses falling tax collections and aims to prevent salary payment issues. Officials note the rate is below market levels.

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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.

In a pivotal update amid union opposition and provincial tensions, the Argentine government announced the removal of the controversial Ganancias (income tax) chapter from its labor reform bill ahead of Wednesday's Senate debate. Patricia Bullrich presented the final version, agreed with allied blocs, to facilitate approval and half-sanction.

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Former Economy Minister Hernán Lacunza praised improvements in public accounts for 2024 and 2025 but warned that by the end of 2025, the fiscal situation lacks room for additional maneuvers. His analysis shows an official surplus of 0.2% of GDP, though adjustments for interest and inflation reveal larger deficits. Lacunza stressed that the end of the financial normalization process will demand greater savings efforts.

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.

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