In the provinces, the governors are already applying the adjustment of US$20,000 million requested by Javier Milei

The controversy arose from the phrase of the President Javier Milei that in 2025 the provinces have to make a Expenditure adjustment equivalent to US$60 billionwhen presenting the Budget 2025 in Congress.

Despite teasing the opposition with the claim that its members do not know how to add and boasting of being an economist, the reality is that The figure given by the president was wrong. Later, the deputy Jose Luis Espert, head of the Budget and Finance Committee, He had to clarify that it was US$20 billion, US$40 billion less than what the president had said..

However, as indicated According to official figures from a group of provinces, up to the first half of this year, that figure will already be reached in 2024. This is stated in a report by the consulting firm Politician Chaco on the accounts of subnational states.

“I estimate that The consolidated budget of the 24 provinces, in the first half of the year, could reach a reduction of US$11,000 or US$12,000 million and, by the end of the year, reach US$20,000 or US$22,000 million. under an assumption that the drop in spending will moderate a little more towards the end of the year,” he told Scope he director of Politikon Chaco, Alejandro Pegoraro.

The consulting firm released Data from 12 provinces that have presented their figures at the end of the first half of the year and these are far from the belief held by the National Executive Branch, that they are a “spending spree”In Formosa, for example, the adjustment was much higher than that proposed by the Casa Rosada. for this year, with a real “chainsaw” of 43%.

The Government began with the Governors rounds of consultations for the approval of the 2025 Budget, where the provinces are going to put these figures on the table. In principle, it would be unfeasible for them to be reduced by the same margin next year as in 2024.

Key points of provincial finances

These are the most notable points to keep in mind regarding the province numbers:

• All the subnational jurisdictions analyzed show a drop in provincial public spending, ranging from -9.9% (CABA) to -42.8% (Formosa). At a consolidated level, the cut in public spending for these 12 jurisdictions is 21.2% real year-on-year.
• In 11 districts, income also falls significantly and only Neuquén shows an increase in this concept. The consolidated figure shows a real year-on-year drop in income of 14.4%.
• Following the logic of the national government, The request by the PEN is being fulfilled: reduction in income but an even greater drop in expenditure.
• Translated into constant 2024 pesos, the cut in public spending is $6.8 trillion. Converted to official dollars, the adjustment in public spending is US$7.495 billion.
• 36.8% of the total cut in public spending came from Personnel Spending (public salaries); 17.6% of the adjustment is explained by Real Direct Investment and 16.3% by Current Transfers, among the most notable.

According to the private report, as of the cut-off date of September 18, there are 12 districts that have information on their budget execution available.

These are: The provinces of Buenos Aires, Catamarca, Cordoba, Chaco, Entre Rios, Formosa, La Rioja, Neuquen, Rio Negro, Santa Fe and Tierra del Fuego are all within the provinces of Buenos Aires, Catamarca, Cordoba, Chaco, Entre Rios, Formosa, La Rioja, Neuquen, Rio Negro and Santa Fe. “These districts, in a consolidated manner, showed income of $27.7 billion and expenses of $25.5 billion, which is why they exhibit a financial surplus of $2.2 billion, equivalent to 8% of its income,” the report notes.

From a revenue perspective, Only Neuquén has so far shown growth of 4% In real terms, driven by the collection of provincial taxes and higher royalties, among others. For their part, the other eleven jurisdictions show declines in their income ranging from -9.4% (CABA) to -26.8% (La Rioja). At a consolidated level, the drop in income is 14.4%.