Argentina’s tax revenue totalled 16,231.8 billion in February, down from 18,337.6 billion in the previous month.
That is a month-on-month fall of 2,105.8 billion. This equals an 11.5% decrease compared with the prior month.
We are seeing a significant month-over-month drop in tax collection, which signals a deepening economic contraction. This nearly 12% nominal decrease is concerning because it challenges the narrative of a sustainable fiscal adjustment. The data suggests that economic activity is slowing faster than the government may have anticipated.
When we factor in recent inflation data, the picture gets worse. With monthly inflation still high, running at a reported 8.5% for February 2026, the drop in real, inflation-adjusted tax revenue is much steeper, pointing towards a severe recessionary environment. This trend aligns with recent industrial production figures, which showed a year-over-year decline of 10.2%, confirming the broad-based weakness in the economy.
For derivative traders, this puts downward pressure on the Argentine peso (ARS). We should anticipate the central bank will be forced to maintain tight monetary policy, potentially even holding off on expected rate cuts to defend the currency. This environment warrants considering strategies that profit from peso weakness, such as buying USD/ARS non-deliverable forwards (NDFs).
Looking back from our perspective in 2025, we recall the initial market rally following the austerity measures introduced in late 2023. This current data point suggests the low-hanging fruit of fiscal consolidation has been picked, and the government now faces the political challenge of maintaining austerity during a painful recession. The sustainability of the fiscal surplus is now in question.
Therefore, volatility is likely to increase in the coming weeks. We can expect Argentina’s sovereign credit default swaps (CDS), currently trading around 1,450 basis points, to face upward pressure as default risk is repriced. Traders might look at buying puts on Argentine equity ETFs or employing straddles to trade the expected increase in price swings around the next major data releases.
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