In the first 26 months of office, the Government of Javier Milei achieved a cumulative reduction in public spending equivalent to 67 billion dollars, consolidating the fiscal surplus as one of the central pillars of the economic program.
The data comes from a report by the Argentine Institute of Fiscal Analysis (Iaraf), led by economist Nadin Argañaraz, which analyzed the magnitude of the adjustment to public accounts and their destination.
According to the study, the cut in spending was significant in terms of Gross Domestic Product (GDP). In the last twelve months to February 2026, national government spending went from representing 19.5% of GDP in 2023 to 14.32%, implying a fall of
5.2 percentage points.
“The fact that this enormous fall occurred in just two years implies a major short-term economic adjustment to economic flow,” the report states.
President Javier Milei.
Added to this reduction is a drop in the weight of interest on the debt. “The real thing today is that annual interest expenditure (on the line) went from representing 1.7% of GDP in the accumulated amount as of December 2023 to 1.2% of GDP in the cumulative amount of the last 12 months.” Thus, the total decrease in spending reaches 5.7 points of GDP
.
Iaraf's work also measures the scope of the adjustment compared to the tax system. The effective reduction in spending “is equivalent to 70% of the collection of the most distortive taxes that exist in Argentina”, reflecting the magnitude of the process
.
In practical terms, the cut is comparable to the possible elimination of key taxes such as the paycheck tax, export withholding, part of theprovincial Gross Revenue and the PAIS tax.
As for the destination of the freed up resources, the report indicates that, of the 5.7 percentage points of reduction in spending, 4.6 points went to eliminate the fiscal deficit and generate a surplus of 0.2 points of GDP.
In detail, 78% of the adjustment financed the elimination of the deficit, 4% was aimed at generating surpluses, while 9% was used to compensate for the fall in non-tax revenues and another 9% to reduce tax pressure.
President Javier Milei.
Savings of billions of dollars
The analysis also highlights the cumulative evolution of the adjustment over the entire period. In 26 months, the reduction in national primary public expenditure is equivalent to 10.4 points of GDP, a figure that rises to 11.1 points when the reduction in interest payments is incorporated
.
Finally, the strongest fact emerges from the calculation in absolute terms: the cumulative difference between the expenditure that would have been maintained with the dynamics of 2023 and that actually executed in the last 26 months shows savings of 121.8 trillion in constant pesos as of February of this year, equivalent to USD 67 billion.
In this way, the economic program of the Milei Government not only eliminated the deficit, but also consolidated a surplus, lowered taxes and reduced the State's weight on the economy, in line with the official objective of moving towards a scheme of greater macroeconomic balance and less burden on the private sector.
