Argentina's government projects 4% growth and 18% inflation for 2027

President Javier Milei’s government predicts Argentina’s gross domestic product (GDP) will expand by four percent next year, with inflation forecast to reach 18 percent.

The Executive unveiled its forecasts on Tuesday ahead of the final year of the president’s term. Milei has already announced that he will seek re-election for another four-year term.

The figures are contained in the 2027 Budget bill that the government will present to Congress, according to the Economy Ministry.

Since taking office in December 2023, Milei has implemented sweeping austerity measures that have led to improvements in the country’s macroeconomic indicators.

Inflation has fallen from triple-digit levels to 33.5 percent year-on-year in August, while the government has also recorded fiscal surpluses for two consecutive years – the first time this has happened since 2008.

But the measures have come at the cost of deep cuts to public spending, the closure of state agencies, tens of thousands of job losses and a sharp decline in the purchasing power of wages and pensions.

In addition to its GDP and inflation forecasts, the government expects average wages to rise by 25.4 percent in 2027, outpacing projected inflation, while the exchange rate is forecast to average 1,728 pesos per US dollar.

“The Budget bill once again provides for a positive fiscal result and it will be the first time in our history that we have four consecutive years of surpluses in the financial balance, without the country being in default,” the Presidency said in a statement.

Fiscal balance is a “non-negotiable” aspect of Milei’s economic policy, it added.

Economy Minister Luis Caputo presented the main budget guidelines at a meeting of the government’s Mesa Política on Tuesday.

The government’s GDP projections are more optimistic than those of the World Bank, which in June revised down its growth forecast for the South American economy from 4.1 percent to 3.7 percent in its Global Economic Prospects report.

The government also projects a trade surplus of US$15.56 billion, based on exports of US$133.98 billion and imports of US$118.42 billion.

The 2026 Budget was Milei’s first since taking office, after he governed for his first two years by extending spending allocations approved under his Peronist predecessor, Alberto Fernández.

The 2026 Budget forecast inflation of 10.1 percent, although inflation reached 21.3 percent in cumulative terms during the first eight months of the year.

The Milei administration also projected GDP growth of five percent this year, but most estimates now put growth at between 3 percent and 3.5 percent.