The “Zero Deficit” is no longer just a slogan; it is the Law of the Land.

In a historic marathon session that ended early this Friday, the Argentine Senate gave final approval to the 2026 National Budget and the critical Fiscal Innocence Law.

This victory marks a turning point for the Javier Milei administration. Despite not holding a numerical majority of its own, the ruling party (LLA) successfully built a winning coalition with the PRO and moderate sectors. This answers the market’s biggest question: Can a libertarian minority pass structural reforms? The answer is a resounding Yes.

The 2026 Budget: “Blind” Discipline

The approved budget maintains the cornerstone of the administration’s philosophy: Fiscal Balance is non-negotiable. Unlike previous administrations that overestimated growth to justify spending, this budget includes an automatic trigger clause: if revenues drop, spending is automatically cut to match.

• Primary Surplus Target: Locked at 1.5% of GDP.
• Debt Servicing: Fully covered without monetary emission.
• Inflation Projection: Aligned with the drastic drop seen in late 2025.

“We have institutionalized solvency. No future politician can print money to pay for a campaign without breaking the law.” — Government Source

The “Fiscal Innocence” Act: A New Era

Alongside the budget, the Senate approved the Ley de Inocencia Fiscal. This establishes a new paradigm for taxpayers.

It implies that taxpayers who have regularized their assets or paid their taxes on time are legally shielded from retroactive persecution by the tax authority (AFIP).

1. Legal Certainty: It ends the era of changing rules retroactively.
2. Asset Protection: Creates a framework of stability for compliant assets.

Market Impact: The Governability Premium

Wall Street is reacting positively not just to the numbers, but to the politics. The legislative success signals institutional maturity.

Investor Takeaway: The risk of a “legislative deadlock” has effectively evaporated. Market analysts view the passing of the Budget as a strong catalyst for Global 2035 and 2041 Bonds. The consensus is that the market will interpret this as the consolidation of the economic model, potentially compressing the Country Risk (EMBI) to new lows.

Strategic Outlook: The established legal framework favors a long-term bullish stance on Argentine assets, as the “political risk” discount begins to fade.