Budgetary Lag and Growing Spending: Two Factors Keeping the Government's Fiscal Crisis Risk Alive

The country faces a fiscal crisis not seen since the last century. Photo: Image generated with artificial intelligence.

Budgetary Lag and Growing Spending: Two Factors Keeping the Government's Fiscal Crisis Risk Alive

TL;DR

  • Public spending execution in the first quarter of 2026 shows a dynamic that does not align with the government's fiscal adjustment goals.
  • A budget backlog of $48.3 trillion from 2025 is pressuring the government's finances, with $24.2 trillion already paid by March 2026.
  • Rigid spending, particularly on functioning and debt service, limits the government's ability to adjust its budget.
  • Investment spending remains low, exacerbated by the backlog from the previous year.
  • Sectoral spending execution is uneven, with some sectors like Mining and Energy executing more than others like the Presidency.
  • Despite a slight overall improvement compared to 2025, the execution is not homogeneous and is driven by specific sectors.