Milei Overhaul Tests Argentina’s $14.3 Billion Provincial Bonds
- Weaker peso makes it more expensive for provinces to pay debt
- Cuts to tax transfers could inflate some regions’ deficits
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President Javier Milei’s plan to cut funding for Argentina’s provinces is casting doubt on a trade investors saw as one of the safest in the country’s battered markets.
Milei’s team wants to reduce funds known as discretionary transfers, which are sent to states on top of the tax revenue they receive from the national government. Cutting the payments — which doesn’t require congressional approval — will add to their financial strains, with local brokerage firms warning that Buenos Aires and La Rioja will bear the brunt of the cuts.