Key Takeaways
- The Milei administration is staking its political capital on securing Senate approval for the 2026 National Budget, a crucial step required for ongoing negotiations with the International Monetary Fund (IMF) and affirming fiscal credibility.
- Led by Patricia Bullrich, the officialist coalition relies entirely on “dialoguist” opposition votes, but the measure risks being derailed by controversial articles concerning the freezing of university funding and the removal of mandated education spending floors.
- The proposed budget projects a primary fiscal surplus of 1.2% of GDP, targets 5% GDP growth, and anticipates an ambitious annual inflation rate of just 10.1% for 2026.
In a high-stakes legislative gamble deemed “all-or-nothing,” the Argentine government is pushing for Senate approval of the 2026 National Budget bill in a challenging post-holiday session. The passage of this fiscal framework is essential for the administration of President Javier Milei, not only to project stability to international markets but, critically, to advance negotiations with the International Monetary Fund (IMF) regarding impending debt payments.
Leading the charge is Patricia Bullrich, the recently appointed chief of the officialist bloc in the Senate. She is tasked with marshaling sufficient votes from allied and “dialoguist” opposition parties to overcome expected fierce resistance from the Kirchnerist faction of the Peronist party. The session is also scheduled to include the controversial “Fiscal Innocence” bill, which aims to facilitate tax amnesty and the repatriation of undeclared foreign currency, often referred to as “dollars under the mattress.”
Bullrich’s immediate objective is to secure the bill’s general approval, which appears likely. A major political inflection point is the potential support from the Peronist bloc “Convicción Federal,” whose members’ votes would signify the first major split within the Peronist Senate ranks and a continued erosion of Cristina Kirchner’s political control in Congress.
However, the real risk lies in the specific, or “particular,” voting phase. A miscalculation by the ruling coalition could force the bill—which must be approved as-is to avoid a return to the Chamber of Deputies with only two business days left in the year—back for further review.
Two articles, in particular, have generated significant conflict and forced Bullrich to carefully count potential defections. Article 12, perhaps the most contested measure, authorizes the Secretariat of Education to freeze funds allocated to a university if the institution’s usage information is deemed insufficient. Furthermore, Article 30 seeks to eliminate minimum percentage floors of GDP established by prior legislation for funding various educational sectors, such as technical schools. While officials claim these legislative floors were “declarative goals that were never met,” the measures have generated significant pushback, notably from the UCR (Radical Civic Union) bloc.
This latest budget battle follows a contentious process in the Lower House, where the Milei government was forced to accept the complete removal of Chapter XI, which controversially deregulated funding for national universities and disability care. Although presidential spokesmen initially suggested Milei might veto the entire budget if the chapter wasn’t reinserted, the administration now appears primarily focused on securing the overall framework to avoid further political friction.
The proposed 2026 budget outlines total spending and resources of approximately $148 trillion pesos, targeting an ambitious primary fiscal surplus equivalent to 1.2% of GDP, and a financial surplus (after debt payments) of 0.3% of GDP. The macroeconomic projections are remarkably optimistic, forecasting 5% GDP growth and an annual inflation rate of just 10.1% for 2026. Notably, the budget calculates the US dollar exchange rate at $1423 pesos by December 2026, a figure some analysts have criticized as exceptionally low given current dynamics. Success in passing this budget is paramount for the Milei government to stabilize its political position and implement its stringent fiscal goals.