Argentina's Poverty Rate Climbs Above 30%, a Setback for President Milei

Argentina's poverty rate surged to 32.3% in the first half of 2026, a significant increase from 28.2% in the latter half of 2025, according to data released Thursday by the national statistics agency, INDEC. Extreme poverty also rose, from 6.3% to 7.5% during the same period. This reversal marks a setback for libertarian President Javier Milei, who is preparing to seek reelection less than a year from now.

The rise in poverty comes after Milei had frequently cited declining poverty rates as evidence that his free-market economic reforms were succeeding. Previously, in the first half of 2024, poverty had spiked to nearly 53% following the government's devaluation of the peso and substantial spending cuts, which made basic goods unaffordable for many Argentines. However, the poverty rate subsequently decreased as Milei's austerity measures helped to curb inflation, reaching an eight-year low of 28% by the second half of 2025.

Thursday's report indicates a loss of momentum, with unemployment rising and increased prices straining purchasing power. Average salaries remain below their real terms when Milei took office in December 2023. INDEC reported that average per-capita household income increased by 11.5% over the previous six months, while the cost of a basic basket of goods used to determine the poverty line rose by nearly 20%.

Across the 31 urban areas surveyed by INDEC, approximately 9.7 million people lived below the poverty line, including 2.25 million in extreme poverty. The figures indicate that nearly 45% of children under 15 are poor. The survey encompasses 30.1 million individuals in major urban centers, not the entire population of 46 million.

Milei inherited an economy grappling with triple-digit inflation and chronic fiscal deficits from his predecessors. He responded with one of Argentina's most aggressive austerity programs in recent history, reducing public spending and subsidies while tightening monetary policy. The administration asserts that fiscal balance is essential for economic stabilization and future improvements in living standards.

Despite achieving macroeconomic stability, the benefits have not yet translated into stronger job growth. Formal private-sector employment has declined for 13 consecutive months, and economic activity fell 2.9% in July compared to the previous month, according to INDEC. Political analyst Lucas Romero of Synopsis Consultores noted that Milei's argument for sacrifice is becoming harder to sustain without tangible improvements in economic activity, employment, and incomes.

Critics argue that the poor have disproportionately borne the cost of economic stabilization, with cuts to pensions and social assistance constituting nearly a quarter of the government's inflation-adjusted spending reductions, according to a September analysis by the Argentine Institute of Fiscal Analysis.

Economy Minister Luis Caputo acknowledged the increase in poverty but highlighted that the rates are still significantly lower than in the first half of 2024. He emphasized on social media that "both rates remain sharply lower than in the first half of 2024."