Managing Fiscal Risks in Argentina : From Stabilization to Resilience

Overview & Synopsis

This report examines how Argentina can strengthen fiscal resilience following the restoration of fiscal balance under the stabilization program launched in December 2023. While the program eliminated monetary financing of the deficit and re-established fiscal discipline, significant vulnerabilities remain, including dependence on agricultural revenues, exposure to foreign-currency and inflation-indexed debt, and rigid public expenditures. Drawing on three years of technical assistance to the Ministry of Economy, the report presents a framework for identifying, quantifying, and managing key fiscal risks. Central to the analysis is ARGMod, a country-specific adaptation of the World Bank’s Macro-Fiscal Model that is integrated into Argentina’s budget preparation process. The report assesses the fiscal impacts of priority risks, including droughts, floods, commodity price fluctuations, and changes in global financial conditions, tracing their transmission through revenues, exchange rates, and financing costs. It also outlines institutional measures and risk-mitigation tools to strengthen fiscal risk management, improve budget planning, and enhance transparency. By integrating risk analysis into fiscal policy and the budget cycle, the report provides a roadmap for moving from short-term stabilization to long-term fiscal resilience and sustainable economic management.