The World Bank cut Argentina’s 2026 growth forecast to 2.1% from 3.6%, while crediting the government’s fiscal adjustment, spending cuts and subsidy changes with improving the country’s financial position. It projected growth of 3.0% in 2027 and 3.5% in 2028, though most projects in a US$186.5 billion investment pipeline have yet to materialize.
The forecasts appeared in the bank’s October 6, 2026, Latin America and the Caribbean Economic Update. Argentina’s economy grew 4.5% in 2025, the bank said. It expects three consecutive years of growth through 2027—the first such stretch in nearly 20 years.
Fiscal Adjustment and Household Bills
A “decisive fiscal-led adjustment” moved Argentina from a large deficit in 2023 to a primary surplus and an overall fiscal balance, the World Bank said. A primary surplus means the state collects more than it spends before interest payments on debt.
The bank credited tighter spending, “cuts to waste and administrative inefficiencies,” and redirected energy subsidies. Those measures, it said, “helped anchor inflation expectations and compress sovereign risk.” The report attributed the improved outlook to “fiscal consolidation, tax reforms and a more open economy.”
The adjustment redirected “price-based energy subsidies away from higher-income households.” Across Latin America and the Caribbean, governments were shifting from “generalized price protections toward targeted mitigation,” the bank said.
Utility and transport bills remain a significant household expense in greater Buenos Aires. In September, a University of Buenos Aires tariff observatory said those bills accounted for 14.6% of an average wage. Households there paid tariffs covering about 54% of costs on average; the state covered the remaining 46%. For years, Argentine governments held down power and gas bills and paid the difference from the budget.
Investors, Energy and the State
The World Bank cited Argentina’s EMBIG spread as a measure of country risk: the extra yield investors demand on the country’s dollar bonds over U.S. Treasuries. The premium averaged about 2,000 points in 2022–23 and about 500 points in 2026, equivalent to roughly 5 percentage points. The bank also pointed to recent upgrades by S&P, Fitch and Moody’s, and said the central bank’s reserve build-up through 2026 had reduced near-term default risk.
The report tied future export growth to large-scale energy and critical-mineral production. It described a strategic framework for critical-mineral supply chains launched by the United States and Argentina on February 5, 2026, linking U.S. financing tools and demand with Argentina’s large-investment incentive scheme, RIGI.
Law 27,742 created RIGI in 2024, guaranteeing participating projects stable tax, customs and currency rules for 30 years. The World Bank counted US$49.8 billion in approved projects and US$136.7 billion under evaluation, within a total pipeline of US$186.5 billion. Most projects, it noted, “have yet to materialize.” How many RIGI projects begin construction will partly determine whether the 2027 forecast is met, the Rio Times reported.
Growth Forecasts and Their Limits
Real output in 2027 is expected to stand 9.9% above its 2024 level, the bank said. Yet Argentina’s economy in 2024 was still 0.4% smaller in real terms than in 2011. The October report didn’t explain why it cut the 2026 forecast by 1.5 percentage points from June, though it said a strong harvest was supporting current activity.
Insufficient growth, the World Bank said, was undermining regional efforts to reduce poverty and economic informality. Susana Cordeiro Guerra, the bank’s regional vice president, said the region’s priority was to build on its resources through policies and investment that could “raise productivity, create better jobs, and increase incomes.”
For Latin America and the Caribbean, the bank forecast growth of 2.2% in 2026, after 2.4% in 2025. It warned that high energy prices and El Niño could weigh on the region. Energy-price volatility could fuel inflation and keep interest rates higher for longer. The World Bank’s data cutoff was September 23, and Argentina’s INDEC had not yet released official third-quarter figures.