Neuquén Maintains Fiscal Surplus in Second Half Driven by Vaca Muerta Royalties

The provincial government of Neuquén, under the leadership of Rolando Figueroa, is maintaining the equilibrium of its public accounts in the second half of the year, consolidating a fiscal strategy that combines budget surplus with public works investment.

Results from the first half of 2026 show that current revenues exceeded 4 trillion pesos, with real growth of 18% in the first seven months of the fiscal year, driven mainly by increased oil and gas royalties derived from Vaca Muerta operations and the impact of Middle East conflict on international crude prices.

This fiscal performance will constitute a central axis of the Neuquén ruling party's discourse strategy for next year's electoral campaigns, differentiating itself from La Libertad Avanza management at the national level. The provincial government argues that its public administration model prioritizes both sustainability of accounts and continuity of infrastructure investments, in contrast with the austerity approach that predominates in the federal government.

Composition and Origin of Provincial Revenues

According to data disclosed by Neuquén's Economy Ministry, the structure of first-half current revenues reveals high dependence on hydrocarbon activity. Of the 4 trillion pesos in current revenues, 1.7 trillion corresponded to royalties, consolidating this source as the province's fiscal engine. Oil royalties accounted for more than 76% of total royalties, gas royalties represented 18%, while hydroelectric royalties completed the remainder.

The second source of provincial revenues came from local tax collection, which reached 1.1 trillion pesos from Gross Income Tax, Stamp Duty, and Real Estate Tax. The Neuquén government highlighted that more than 84% of current revenues are of provincial origin, emphasizing its own collection capacity and minimal dependence on central government transfers.

In contrast, national revenue-sharing and special law transfers totaled only 0.6 trillion pesos. This reduced federal contribution has become a recurring complaint from Governor Figueroa to the national government. The provincial administration's central argument is that Neuquén contributes approximately 5% of the country's Gross Domestic Product, and therefore considers insufficient the share it receives in revenue-sharing distribution.

Expense Containment and Budget Structure

On current expenditures, the province executed 3.4 trillion pesos during the first half of 2026, which was lower than revenue growth and allowed for surplus generation. Wage expenditure constituted the largest budget item, consuming 2.4 trillion pesos, equivalent to more than 70% of total current spending. This figure reflects the government's commitment to state workers: Neuquén has approximately 70,000 public employees whose salaries are adjusted quarterly for inflation according to an agreement in force with state unions.

The second budget item in importance was transfers to municipalities, totaling 0.5 trillion pesos. This amount includes automatic provincial revenue-sharing and discretionary appropriations from the Executive Branch destined for local governments. The strategy of maintaining these transfers reflects the provincial executive's interest in sustaining public investment in municipalities, aligning local fiscal policy with the regional growth strategy.

Carola Pogliano, Neuquén's Finance Secretary, explained that the increase in crude oil prices was decisive in partially offsetting the impact of inflation higher than initially projected in the budget.

«All consulting firms are estimating that annual inflation will be above 30%»

, she stated in official remarks, underscoring the need for budget adjustments as the fiscal year advances.

Nevertheless, the numbers demonstrate that real current revenue growth allowed maintaining the gap with spending growth. During the first seven months of the year, current revenues grew 18% in real terms, while current expenditures increased 7.8%, a gap that enabled the fiscal equilibrium maintained by the Figueroa administration.

Fiscal Result and Political Differentiation Strategy

The first half of 2026 economic result yielded a surplus of 0.5 trillion pesos, equivalent to 583.588 billion. This figure constitutes the material foundation upon which the provincial government builds its narrative of responsible and differentiated management relative to national policies. The central message is that Neuquén achieves fiscal order without sacrificing public goods investment, a formula that explicitly contrasts with the austerity emphasis characterizing Javier Milei's government.

Figueroa's fiscal architecture rests on three pillars: budget surplus as a signal of prudence, revenues from own provincial sources as the basis for autonomy, and public investment as a growth instrument. This model is presented as an alternative to the national administration, generating differentiated political space within the ruling coalition that allows the provincial executive to position itself with greater independence.

Public Investment and Projects Under Execution

During the first half of 2026, the province maintained the pace of public works investment, though still short of budgeted annual goals. Direct Real Investment reached 396.079 billion pesos in the first semester, when the forecast for year-end is 1.1 trillion. This means that at mid-year approximately 36% of the annual goal had been executed, a proportion the government partially attributes to seasonal factors.

The Neuquén administration explains that climate restrictions during winter paralyze much of the work in cordillera zones, delaying budget execution during that period. With spring's arrival, suspended projects will resume, and additionally new tendered works will be activated, including those committed to the Vaca Muerta oil corridor that were agreed with deposit operator companies.

The period's financial result was 137.377 billion pesos, reflecting the impact of financial operations and other non-operating items. The strategic approach of the Figueroa administration emphasizes the pursuit of «sustaining growth without sacrificing fiscal order», a formulation that stands as an identity mark against previous Neuquén governments and differentiation relative to national economic policy.

2027 Budget Development and Macroeconomic Projections

Officials from Neuquén's Economy Ministry are in the phase of developing the 2027 Budget proposal, whose presentation is scheduled for October 31 according to legal deadlines. Budget construction will incorporate the macroeconomic variables that the national president presented to Congress: estimated annual inflation of 18%, an exchange rate of 1,847 pesos per dollar for year-end, and projected GDP growth of 4%.

Additionally, the provincial government will integrate its own estimates regarding gas and oil production for 2027, as well as forecasts on international commodity prices. This information will be fundamental to project the level of royalties the province will receive next year, given that fluctuations in oil and natural gas prices have direct impact on Neuquén's fiscal revenues and the viability of the surplus-with-investment strategy.

Neuquén's dependence on hydrocarbon revenues means that any significant variation in international prices generates budget uncertainty. Nevertheless, the Figueroa administration has opted to build its fiscal discourse around the capacity to generate savings in years of high prices, creating maneuvering margins for periods of lower bonanza. This countercyclical strategy differentiates its positioning from previous governments that tended to expand spending as royalty revenues grew.