UNICEF admits that Milei's Argentina has lifted 1.7 million children out of poverty: "It's something worth highlighting."

Amid an economic scenario marked by historic fiscal adjustment, reforms to liberalize key sectors of the economy, and a plan that promised to do some short-term damage to the country's economy, poverty has been rapidly and drastically reduced, against all odds. But not only general poverty; child poverty has also been significantly reduced , drawing the attention of institutions like UNICEF. Argentina has achieved a notable improvement in its most sensitive social indicators. According to UNICEF, nearly 1.7 million children have escaped poverty in the last year, a surprising figure even in the context of severe cuts in public spending. This was highlighted by Rafael Ramírez Mesec, the organization's representative in the country, who described it as a "very striking and noteworthy" phenomenon .

The achievement is even more significant given the context of adjustment , with a reduction in public spending equivalent to five percentage points of GDP, one of the largest in recent decades. Despite these restrictions, the alleviation of child poverty is one of the most encouraging pieces of news after years of a complex economic and social outlook in Argentina.

It's fair to highlight that part of the improvement in this indicator is due to a better redistribution of public spending. Although Milei's government has cut public spending across the board , specific measures such as increasing the Universal Child Allowance (AUH) and extending coverage of the Food Card to children under 17 have been essential in improving the living conditions of the most vulnerable households. "Although there is debate about whether the effect is temporary or structural, the truth is that the impact has been real and positive," stated Ramírez Mesec during an interview with Infobae . However, calculations by various economists highlight that the decline in child poverty would have also occurred (albeit to a lesser extent) without the increase in these items.

The improvement in real wages (adjusted for inflation) and improved labor market data have also allowed hundreds of thousands of children to escape poverty in Argentina. On the one hand, the country's sharp decline in inflation (the monthly CPI has fallen from 25% to 2.8% in just over a year) has been key to ensuring that wages have risen above prices, increasing the purchasing power of Argentines. The latest data published by Indec (the Argentine National Statistics Institute) revealed that employment had reached a historical high , reaching 13.596 million employed persons. However, the increase in these items directly linked to improving the lives of children has been key to the dramatic decline in such a short period of time.

Overall, poverty has seen a significant decline in recent months, amid a return to economic growth, rising real wages, record employment in the country, and the slow recovery of foreign investment. However, the poverty rate in Argentina plummeted in the second half of 2024 to 38.1% (a drop of almost 15 percentage points) thanks to the recovery of the real economy, employment, and real wages (adjusting for inflation). While the poverty rate has plummeted sharply, employment has reached all-time highs, reaching 13.596 million employed persons, the highest in the entire historical series. At the same time, real wages are now more than 3% above levels prior to Javier Milei's arrival at the Casa Rosada. This virtuous cycle of economic recovery, job creation , and rising real wages has enabled this significant drop in poverty in Argentina.

However, the official data published by INDEC showed that poverty among Argentina's urban population stood at 38.1% in the second half of last year, a drop of 14.8 percentage points compared to the rate recorded in the first half of 2024, official sources reported on Monday. According to a report by the National Institute of Statistics and Census (INDEC), the poverty rate stood at 8.2% in the second half of last year, 9.9 percentage points below the rate recorded in the previous half.

In the year-on-year comparison, it is worth remembering that the poverty rate fell by 3.6 percentage points in the second half of last year , while the extreme poverty rate decreased by 3.7 points. The population most affected by poverty is children up to 14 years of age, a group in which the poverty rate is 51.9% and the extreme poverty rate is 11.5%. Although pensions have become the focus of debate due to the slowdown in their increases, poverty also decreased among those over 65 thanks to lower overall inflation. Given these general data, it seemed logical that child poverty would also have decreased significantly, as it has.

All of the above coincides with the good moment of the country's economy , which seems to register solid growth, taking advantage of the inertia achieved after emerging from the recession in the third quarter of 2024. The International Monetary Fund (IMF) forecasts that Argentina's economy will grow by 5.5% this year, half a percentage point above what was forecast in January, which, if realized, would imply a strong recovery compared to the decline recorded in 2024.

According to the "Global Economic Outlook" report published Tuesday by the IMF, Argentina's gross domestic product (GDP) will grow by 5.5% this year, up from a contraction of 1.7% in 2024, a year marked by the severe fiscal adjustment implemented at the end of 2023 by the government of Javier Milei.