President Santiago Peña's government remains firm in reducing the fiscal deficit, which had exceeded 5% before his term, and is on track to meet the 1.5% of GDP target set by the Fiscal Responsibility Law. Since taking office, the current administration has prioritized adjusting public accounts, which were inherited with an imbalance that prevented achieving investment grade and compromised economic growth.
The effort has already yielded results: for the first time in history, the country achieved investment grade, first from Moody's and then from Standard & Poor's (S&P). These ratings signal predictability for global investors and strengthen the country's credibility in financial markets.
Deficit reduction is not a technical issue distant from ordinary citizens. It means that people's and companies' money tends to maintain and increase its purchasing power, with lower incidence of taxes, debt, or inflation to cover the fiscal gap.
The government rejects pressure from analysts and sectors that advocate increasing the deficit to finance public works and social programs. According to the administration, raising the deficit ceiling would be a "banana peel" leading to a cycle of unsustainable spending, with negative consequences for the country risk and investments. "There is no free lunch," economist Milton Friedman noted, as cited in the article.
To honor overdue commitments, the government uses factoring, selling work certificates to the banking system to obtain liquidity, while paying banks on time. This measure is considered exceptional but compatible with the fiscal target.
The government argues that the solution is not to loosen public spending but to deepen reforms that expand economic freedom, generate jobs, and increase wages. Maintaining fiscal balance is seen as essential for long-term stability and growth.