The IMF warns that by 2026, retirement and pensions will absorb almost half of public spending, relegating subsidies and public works.

The International Monetary Fund (IMF) projected that by 2026 , retirement and pensions will represent 46% of primary spending in Argentina, up from 34% in 2023. This figure comes from the latest Staff Report published in August, which warns of a structural change in the distribution of national public spending.

According to the agency, pension spending will continue to increase in the coming years. In 2025, it is expected to grow by 0.6 percentage points of GDP compared to 2024, and in 2026, it will add another 0.1 percentage points . This increase occurs in a scenario of sharp reductions in economic subsidies and a decline in the share of other items, such as public works and transfers to provinces and universities.

According to estimates, energy and transportation subsidies—which in 2023 represented 11% of primary spending—will fall to 5% in 2026. Capital spending, which includes public works and capital transfers to provinces, will fall from 8% to 3% over the same period. Current transfers to the public sector will also fall from 6% in 2023 to 3% in 2026.

In contrast, the IMF forecasts that government payroll and social programs will remain relatively stable as a share of total spending. Thus, the pension system is consolidating its position as the central component of public finances, displacing items that historically accounted for significant resources.

The agency estimates that the National Government's primary balance will improve in 2026, rising from a surplus of 1.6% of GDP in 2025 to 2.2% in 2026. However, the increased burden of debt interest —which will rise from 1.2% to 2.2% of GDP—will bring the overall fiscal balance back into balance.

Between 2025 and 2026, pension spending would see a real increase of 6.5%. Transportation subsidies would fall by 52.7% in real terms, and current transfers would decline by 5.7%. In contrast, items such as capital expenditure, social assistance, and energy subsidies would show partial increases.

The report also indicates that revenues will reach 17.3% of GDP in 2026, with a 0.7 percentage point increase in tax collection. However, the improvement in resources will be offset by the increase in debt interest.

In conclusion, Argentina will reach 2026 with pension spending that will absorb almost half of primary spending . This creates a scenario in which the retirement and pension system consolidates its position as the main variable in public finances . For the Argentine Institute of Fiscal Analysis (IARAF), the sustainability of the accounts will depend on how this item evolves, beyond the reduction of subsidies and the improvement in tax revenues.