CÓRDOBA.− The negotiations between the allied governors and the Casa Rosada added one more chapter when the Minister of the Interior, Diego Santillijoined last Tuesday to the meeting of the leaders of the Norte Grande. While the official’s priority is to approve the electoral reform and eliminate the PASO elections, the governors insisted on demanding infrastructure works.
With the objective of sustaining the fiscal surplus, the Casa Rosada maintains the adjustment on discretionary transfers and the governors face a increasing deterioration of its public accountsin a context of recovery of activity that is still insufficient and increasing pressure on expenses in salaries, health, education and public works.
If the provinces had maintained the same level of real spending in this first semester that they exhibited in the same period in 2025, they would go from a financial surplus equivalent to 1% of total spending to a deficit of 2%.
Tierra del Fuego would deepen its red from 8% to 11% of its total expenditures; Chaco would go from a deficit of 7% to 10%; Chubut would jump from 4% to 8%, and Buenos Aires would widen its imbalance to 6% of total spending. Four provinces that had shown a surplus in the first half of 2025 – Misiones, Río Negro, Formosa and La Rioja – would now go into negative territory.
The data comes from a work by economists Marcelo Capello, Martín Fiore and Valentina Gallardowho warn that the provincial financial deterioration occurs even in a year in which the Argentine economy would grow again. According to his projections, GDP could expand around 3.5%, but total provincial resources would fall 2.6% in real terms in the first five months of the yeara dynamic that once again sets off alarms in subnational administrations.
Economists carry out another exercise, which is to estimate how much the annual spending of each province should vary in the first semester to maintain financial balance based on the evolution of their expenses. Thus, Tierra del Fuego and Chaco should reduce their spending by 11% and 10%, in real values and compared to the first half of 2025; in Chubut it should reduce 8%, in Misiones 7% and 6% in Buenos Aires. On the contrary, it could increase 13% in real terms in Jujuy; 8% in Santiago del Estero and Mendoza and 7% in Córdoba, which would maintain balance anyway.
The report focuses on a phenomenon that today affects a good part of the relationship between the Nation and the provinces: The national fiscal adjustment ended up transferring a significant part of the financial pressure to the governors. The Casa Rosada managed to consolidate the surplus through a sharp cut in spending, especially in retirements, public works and transfers. And the provinces were left in the labyrinth of receiving less national funds, having their own collection still weak and much more rigid spending structures.
The study shows that May left partial relief for the provinces. National automatic transfers grew 8.2% real year-on-year, driven mainly by the performance of Profits. The improvement was linked to the tax calendar of companies with balance sheet closing in December, which generated an extraordinary income of co-shareable resources.
However, the report itself clarifies that Behind this monthly improvement a much more fragile situation persists. “Taxes linked strictly to the internal market and internal consumption have conditioned the volume of transfers to provinces in recent months,” he describes. The rebound has not yet been consolidated in the taxes most associated with the level of activity.
With a magnifying glass on the accumulated between January and May, automatic transfers still show a real year-on-year drop of 2.5%. The picture worsens when discretionary transfers are incorporated. As a result, total remittances to the provinces show a real decrease of 4.8% in the accumulated annual figure.
Heterogeneous map
Behind these numbers there appear very marked differences between jurisdictions. Santa Cruz appears as the most affected province in terms of total transfers, with a drop of 6%. La Rioja, Buenos Aires, Río Negro, Neuquén and Tierra del Fuego also show significant deteriorations, all with drops close to 4%. On the other hand, La Pampa (2%) and Misiones (1%) register net improvements in total funds received from the Nation.
In regards to the provincial own collection −one of the factors that explains the growing concern of the governors−, on average, they grew 0.6% in real terms so far in 2026. Recovery is insufficient to compensate for the drop in national transfers and spending pressure.
Entre Ríos appears as the province with the best tax performance, with an improvement of 11%, followed by Neuquén and San Juan, both with increases of 8%. At the opposite extreme are Misiones, with a drop of 22%, and La Rioja, with a drop of 13%.
Neuquen stands out within the Argentine fiscal map. Driven by hydrocarbon royalties and the Vaca Muerta effect, it managed to increase its total resources by 5% and became the only one that combines improved income and relative fiscal strength. The Ieral highlights that “more than 100% of the increase in its total resources is explained by what happened with its own resources.”
The situation of the province of Buenos Aires appears between more delicate by political weight and financial magnitude. According to the study, it closed 2025 with a financial deficit equivalent to 5.6% of its total spending. During this year, its total income shows a real drop close to 1%. The simulation for the first semester places it among the jurisdictions with greater potential deterioration if expenditures are not adjusted.
The most complicated scenario is concentrated in Tierra del Fuego, which closed 2025 with a financial deficit equivalent to 14.1% of its total spending, the worst provincial result in the country. Imbalances also appear in La Pampa (-11.6%), Chubut (-7.4%) and Chaco (-6.8%).
From the comparison between the national and provincial adjustment it emerges that, between 2023 and 2025, the National spending accumulated a real drop of 24.9%, while the consolidated provincial spending was reduced by 9.6%.
It is along these lines that the Casa Rosada insists that the governors still have room to deepen the turnstile while the leaders negotiate support in Congress for financing public works and “return” of funds that correspond to them by law.
