2026 Budget Will Not Escape the Specter of Underfunding and Will Be Complicated by Debt and Instability
The country must start spending less as soon as possible. Photo: Image generated with Artificial Intelligence.
TL;DR
- The 2026 budget of $547 trillion faces fiscal pressures on revenue, spending, and debt.
- In 2025, tax collection growth of 11% was insufficient to meet official targets, with income tax revenue falling significantly short.
- Public spending in 2025 represented 22.9% of GDP, exceeding planned levels and contributing to a fiscal deficit estimated at 6.3% of GDP.
- Government debt rose to 64.7% of GDP, financed through increased borrowing.
- Short-term financing instruments represented 19.6% of internal financing in December 2025, a significant increase from the four-year average.
- Government cash reserves are at historical lows, with cash in pesos amounting to $9.9 trillion as of January 30, 2026, significantly below the historical average.
- Budget execution has accelerated in early 2026, particularly for investment and debt service commitments.
- Interest spending reduction in 2025 was largely due to accounting adjustments, not structural fiscal improvement.
- The fiscal scenario for 2026 remains uncertain, dependent on adjustments between effective revenue, financing needs, and cash capacity.