Public Efficiency: Poverty Hits New Lows in Milei's Argentina

Poverty in Argentina has reached its lowest levels in years, a decline attributed to disinflation and the expansion of specific social aid programs, such as the AUH, which has been revalued and had its scope broadened.

Poverty in Argentina has fallen sharply again. In the third quarter of 2025, the rate stood at **27.5%**, according to a projection by the National Council for Social Policy Coordination (CNCPS) based on data from the National Institute of Statistics and Censuses (Indec). This represents an interannual drop of **10.8 percentage points** compared to the same period in 2024 and a decrease of **27.3 percentage points** since the administration of President **Javier Milei** began. Extreme poverty, meanwhile, fell **3.8 percentage points** in the same interannual period and **14.8 percentage points** since the current government took office, translating into millions of people escaping extreme poverty.

This scenario unfolds alongside a government plan focused on reducing public spending and economic deregulation. Despite cuts, consolidated spending among the state, provinces, and municipalities has returned to **2008** levels as a percentage of Gross Domestic Product (GDP). Estimates from the Argentine Institute of Fiscal Analysis (IARAF) suggest that national primary public spending will end 2025 with an annual reduction of **38 billion dollars** compared to 2023, settling at **31.4% of GDP**, lows not seen in almost two decades.

## Efficient and Smart Public Spending

The question arises as to how poverty could have plummeted so markedly amidst the largest public spending cuts in recent Argentine history. The answer has two fundamental pillars. On one hand, strong disinflation, meaning decreasing inflation, has allowed real wages to begin recovering. This has lifted thousands of employed families out of destitution and poverty. According to Unicef data, almost **two million children** have been lifted out of poverty.

The other, less publicized but equally crucial, factor is the expansion and revaluation of specific aid for families with children. The **Universal Child Allowance (AUH)** (a specific benefit for families with children under 18 meeting certain economic and other requirements), has seen a revaluation of almost **500%** since **Javier Milei** came to power. Furthermore, its update is monthly, closely tracking inflation data, ensuring its purchasing power is maintained.

## Automation and Simplification of Social Benefits

The government has implemented measures to ensure these allowances reach beneficiaries more directly and easily. Starting in 2026, AUH payments will be automatic for families with children between **0 and 4 years old**. This change is part of a broader strategy to simplify procedures and automate access to social benefits, aiming to reduce bureaucracy and provide greater certainty to those receiving these aids.

Under the new system, AUH beneficiaries with children in this age group who comply with mandatory health and vaccination checks will receive **100% of the allowance** without needing in-person or virtual procedures, or submitting additional documentation. Information cross-referencing between agencies will allow for automatic verification of compliance with requirements. The monthly income for these families will no longer be subject to withholdings and will be received in full each month, eliminating delays and procedures that were previously mandatory.

This automation also extends to the **Maternity Allowance for Social Protection**. The **20% accumulated** at the end of pregnancy will be paid automatically, provided the beneficiary has completed the required medical check-ups, without the need for additional procedures. The simplification of these processes aims to expedite fund disbursement and ensure that benefits effectively mitigate child and family poverty.

## Synergies and Pending Challenges

The combination of the AUH, revalued and with expanded reach, along with the recovery of the labor market, where real wages are growing and the unemployment rate has fallen to **6.6%**, has generated positive synergies. These factors have significantly contributed to the statistical decline in poverty. However, the path ahead still presents significant challenges. Argentina's economy remains fragile, and although inflation has eased, it remains at levels still high for the region. Furthermore, the quality of employment, while showing improvement in job creation, is still an area that requires attention to ensure a sustainable and equitable recovery.