The deficit is dead. In just two years, President Javier Milei has executed the most profound fiscal adjustment in modern history, reducing primary national spending by $38 billion USD (approx. $50 trillion pesos in constant terms).

According to a report by IARAF based on INDEC data, consolidated public spending has fallen to 31.4% of GDP, the lowest level since 2008.

Precision Cuts, Not Chaos

Contrary to the opposition’s narrative of “blind cuts,” the data shows a surgical approach targeting political inefficiencies:

• Transfers to Provinces: Slashed by 93.8%.
• Subsidies: Reduced by 83.9%.

Meanwhile, social assistance was shielded. The Universal Child Allowance (AUH) was the only budget item to see real growth, increasing by 70% in real terms ($1.9 billion USD).

“The adjustment was paid for by the political caste and inefficient structures, while direct assistance to the vulnerable was reinforced.”

Consolidation Phase

The bulk of the shock therapy occurred in 2024 (dropping 6.3 points of GDP). The 2025 data confirms a shift towards fiscal consolidation, proving that the surplus is structural, not a one-time event.

Investor Takeaway: The sovereign risk premium is collapsing because the government has proven it can maintain a surplus without social unrest. Argentine bonds (Global 2030s) remain a strong buy as the country normalizes its macroeconomy.