The makeup cracks when the base, the concealer or dust separate from the skin, creating irregular patches or visible lines. This may be due to several factors, such as dry skin, lack of hydration, excess product, or incorrect choice of cosmetic product. When interest rates shoot, it is not an opportunity, it is that the risk increases in a dangerous way.
The increase in interest rates can have a negative impact on the value of financial assets, such as bonds, and can lead to a slowdown in economic activity. One of the main arguments of the Argentine government to justify its economic program is the alleged obtaining a “genuine fiscal surplus” during the first half of 2025. According to official figures, the tax adjustment reached 4.9 % of the Gross Domestic Product (GDP) in terms of primary spending, which allowed to exhibit an accumulated surplus of 0.2 % of GDP in the twelve months prior to May.
This achievement has been presented as the cornerstone of the stabilization program, both before the citizens and in front of international creditors. However, a more detailed analysis reveals that this surplus is, to a large extent, accounting and non -financial, built on little sustainable assumptions and makeup strategies that compromise the future credibility of the fiscal scheme.
The core of the inconsistency is found in the deliberate omission of the most dynamic component of the public deficit: the capitalized interests of the treasure debt. While payments “in cash” (Cash Interest) amounted to $ 4,356 billion in the first five months of the year, the interest accrued and not paid – that is, capitalized in new liabilities – totaled $ 23,422 billion (Ministry of Economy, 2025). Together, this carries the total interest of the period to $ 27,800 billion, equivalent to 8.3 % of GDP. If this component is incorporated to the calculation of the fiscal result, the alleged surplus disappears, and the consolidated deficit is around 5.2 % of GDP, even without considering the quasi -sciscal of the BCRA.
This practice, although legal in accounting terms, is highly problematic from an intertemporal sustainability perspective. As authors such as Eicheren, Hausmann and Panizza (2005), excess reliance in indexed domestic debt and with capitalizable interests generates a “tax dominance trap”, in which liabilities expand faster than repayment capacity.
In the Argentine case, 52 % of the public debt stock is today indexed to inflation or exchange rate, and a growing part is subject to capitalization schemes that transfer the fiscal effort to the future. Far from correcting imbalances, the current program kicks them forward, aggravating exposure to shocks and reducing degrees of economic policy freedom.
Liquefaction of spending has also been a key component of the adjustment. Between January and May of 2025, primary expenditure fell 36 % in real interannual terms, with specially severe reductions in retirement, public works, transportation subsidies and transfers to provinces (Ministry of Economy, 2025). This dynamic allowed to show a formal improvement of fiscal accounts, but at the expense of eroding the pillars of the social protection system and economic infrastructure. The literature on tax consolidations shows that the most successful adjustments – in terms of sustainability and growth – are those that are based on structural reforms and efficiency improvements, not on the deterioration of public capital or in the transfer of cost to the most vulnerable sectors (Alesina & Ardagna, 2010).
In addition, the fiscal result has been assisted by extraordinary sources of financing, such as debt placements in foreign currency acquired by non -residents, and transfers of the BCRA to the Treasury in the form of utilities accrued by valuation difference. These operations, although they do not violate current regulations, constitute covert forms of deficit monetization, which may have deferred contracting effects or inflationary effects, depending on the context. In practice, these transfers allow financing payments without registering an immediate increase in the monetary base, but they generate expectations of future issuance, which stresses the yield curve and deteriorates confidence in the program.
Another problematic component is the growing concentration of maturities in the short term. More than 92 % of the placements made in the second quarter of 2025 expire in the next 100 days, which generates a dynamic of financial “snowball”. The need to carry out weekly tenders to cover maturities raises the sensitivity of the treasure in the face of market humor changes, especially in a context of interest rates that exceed 40 % annual nominal in short -term instruments. The risk of rollover – the impossibility of renewing debt without paying prohibitive rates – is therefore structural and not merely conjunctural (Blanchard, 2020).
In institutional terms, the use of fiscal makeup compromises the transparency of the State and mine the confidence of investors, multilateral organizations and citizenship. Fiscal credibility is not built only with formal results, but with intertemporal consistency and clarity in contingent liabilities. International experience shows that programs based on “false surpluses” – as the Greek case prior to the 2010 crisis, or that of Turkey in the early 2000s – usually generate a reputational collapse that forces disorderly corrections (IMF, 2011; Manasse, 2009).
The International Monetary Fund has avoided explicit pronouncements on the sustainability of the Argentine Fiscal Program, but the statements of technical officials and goals reviews reveal a growing concern. According to transcended in specialized media, the goal of accumulation of reserves and the primary result for the third quarter could be flexible in the September review, which would imply a tacit admission of the partial failure of the program (Financial Times, 2025). Likewise, the recent warnings of JP Morgan, Morgan Stanley (MSCI) and Barclays point to the fragile and non -sustainable nature of the adjustment, highlighting the inability of the current model to generate a balanced fiscal path without resorting to extraordinary mechanisms and of doubtful transparency.
In sum, the Argentine fiscal result to the first semester of 2025 does not constitute a genuine surplus, but an accounting balance built on three unstable pillars: social spending license, postponement of interest payment via capitalization, and short -term indebtedness at growing rates. This architecture does not resist a rigorous analysis from the theory of public finances or from international fiscal responsibility standards. Far from consolidating solvency, the current model configures a structural vulnerability that severely limits the state’s capacity to sustain economic stabilization in the medium term.
Director of Esperanza Foundation. Postgraduate professor at UBA and private universities. Master in International Economic Policy, Doctor of Political Science, author of six books.
Source: Ambito
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