The poverty rate in Argentina reached 52.9% in the first half of the year, marking the highest level since 2003. This significant rise is one of the most severe consequences of the combination of economic adjustments and high inflation that has characterized the early months of Javier Milei’s government, which he describes as a “legacy.”
A report published this Thursday by the National Institute of Statistics and Censuses (Indec) indicated that the rate measuring the population unable to meet its basic food and service needs increased by 11.2 percentage points compared to the second half of 2023 and surged by 12.8 points compared to the first half of the previous year.
The recorded poverty rate of 52.9% for the first half of the year is the highest since the first half of 2003, when the figure was 54% based on a statistical series prior to the current one.
At the same time, the indigence rate was 18.1% in the first half of the year, representing a rise of 6.2 points from the previous semester and an increase of 8.8 points year-on-year, reaching its highest point since the second half of 2003.
The measurement, whose results were published this Thursday, considers the standard of living in the 31 most densely populated urban centers in the country, which encompass 29.6 million people out of a total population of around 47 million in Argentina.
If we extrapolate the urban poverty rate to the total population, it is estimated that there were 24.8 million poor people in Argentina during the first half of the year, an increase of 5.4 million compared to the end of 2023, when Milei took office as President.
The total number of homeless individuals also grew by 3 million in just six months.
Given that Indec calculates poverty based on the ability to access the basic basket of goods, social indicators are closely linked to household income trends and the costs of food and services.
During the first semester, the cost of the basic basket of food and services, which defines the poverty threshold, rose by 76.1%, while the value of the food basket used to determine extreme poverty increased by 63.4%.
Alongside the severe adjustments implemented by Milei to stabilize Argentina’s macroeconomic imbalances, the country’s economy contracted by 3.4% in the first half of the year, with unemployment reaching 7.6% in the second quarter, a rise of 1.4 points year-on-year.
Data from the labor market also reveal a decline in formal employment, an increase in labor informality, and more individuals working independently.
In these last two categories, incomes are lower, and many are unable to keep pace with inflation, driving thousands into poverty, even among those who are employed.
The Milei administration acknowledged that the poverty rate announced this Thursday reflects the “harsh reality” facing Argentine society, but attributes it to past governments rather than current policies.
“The government inherited a disastrous situation. (…) Inflation leads to increased poverty for the most vulnerable. The most effective way to combat poverty is, first, to tackle inflation,” presidential spokesman Manuel Adorni stated at a press conference this Thursday.
Adorni claimed that Milei’s measures of fiscal and monetary discipline helped avert hyperinflation, which, had it occurred, could have skyrocketed the poverty rate to 95%. “We would have faced a sea of absolute poverty if hyperinflation had not been avoided,” he remarked.
Those who cannot grasp macroeconomic principles include nearly seven out of ten children under 14 who are currently living in poverty, as well as three out of ten in that demographic who do not even meet their daily food needs.
The second most vulnerable group is young people: 60.7% of Argentines aged 15 to 29 are poor, and 21.2% are living in extreme poverty.
The Current State of Poverty in Argentina: A Deep Dive into Recent Statistics
The poverty rate in Argentina surged to 52.9% in the first half of the year, marking the highest level since 2003. Factors contributing to this staggering figure include economic adjustments and rampant inflation that have characterized the early tenure of President Javier Milei. Milei refers to this distressing social scenario as a “legacy” of previous administrations.
Understanding the Poverty Rate
According to the latest report from the National Institute of Statistics and Censuses (Indec), the percentage of the population unable to meet basic needs for food and services increased by 11.2 percentage points compared to the second half of 2023. In comparison to the first half of last year, the poverty rate rose by 12.8 points.
The 52.9% poverty rate in the first semester represents a critical juncture in Argentina’s economic landscape, equating to approximately 24.8 million individuals facing poverty—an increase of 5.4 million since the end of 2023 when Milei took office.
Indigence and Poverty: A Closer Look
The indigence rate, which measures those unable to meet their basic food needs, stood at 18.1% during the same period. This indicates a concerning increase of 6.2 points from the previous semester and a dramatic rise of 8.8 points year-on-year, marking the highest levels since the second half of 2003.
| Indicator | Value | Change from Previous Semester | Year-on-Year Change |
|---|---|---|---|
| Poverty Rate | 52.9% | +11.2 points | +12.8 points |
| Indigence Rate | 18.1% | +6.2 points | +8.8 points |
Key Factors Influencing Poverty Rates
The dynamics of poverty in Argentina cannot be understood without considering the cost of living. In the first half of the year, the basic basket of food and services—which defines the poverty line—rose by an eye-watering 76.1%. The cost of the food basket for indigence also increased significantly, by 63.4%.
These increases in living costs are accompanied by a deep contraction of the Argentine economy, which shrank by 3.4% in the first half of the year. Unemployment, too, saw a rise, reaching 7.6%, an increase of 1.4 points year-on-year, further straining household incomes.
The Labor Market and Economic Adjustment
The current labor market situation paints a dire picture: formal job destruction is rampant, and the rates of labor informality are increasing. Many individuals are now working in informal jobs or as self-employed, leading to lower incomes. This scenario is particularly alarming as it further exacerbates the struggle against inflation, pushing even employed individuals into poverty.
Government’s Reaction to the Economic Crisis
In light of these overwhelming statistics, the Milei Government has termed the recently disclosed poverty rates as reflecting a “crude reality.” However, spokespeople for the administration have made it clear that they attribute this crisis primarily to the “legacy” of previous governments.
“The Government inherited a disastrous situation. Inflation means more poverty for the poorest. The best way to fight poverty is, first, to fight inflation,” remarked presidential spokesman Manuel Adorni in a press conference. This perspective underscores the administration’s position that poverty stems largely from prior administrations’ mismanagement.
Youth and Child Poverty in Argentina
One of the most heartbreaking aspects of the current poverty crisis is its disproportionate impact on the youngest members of society. A significant portion of the affected demographic includes children; nearly 70% of those under 14 are living in poverty. Among this group, over 30% do not cover their basic daily food needs. Young people between the ages of 15 and 29 also experience high poverty levels, with 60.7% classified as poor.
Case Studies: Real-Life Impact of Poverty in Argentina
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Maria’s Story: A 32-year-old mother of three, Maria lost her job in a textile factory due to economic layoffs. She now relies on informal work, earning only enough to buy basic groceries. Despite her efforts, she struggles to afford rent, leading to unstable living conditions for her family.
- Lucas’s Challenge: At 18, Lucas navigates college while working part-time. With 60.7% of his peers facing poverty, he finds it increasingly difficult to afford tuition and living expenses. The burden of financial instability affects his education and future prospects.
Practical Tips for Addressing Poverty
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Community Engagement: Encourage local initiatives that support vulnerable populations, such as food banks and job training programs.
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Advocacy for Policy Change: Engage with local leaders and policymakers to address systemic issues contributing to poverty, advocating for stronger social safety nets.
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Financial Literacy Programs: Support programs that teach budgeting skills and financial management, enabling families to make informed decisions about their resources.
- Support Local Businesses: Mobilize communities to buy from local businesses, helping to stimulate the economy and create jobs.
Conclusion
The rising poverty rate in Argentina reveals a multifaceted crisis rooted in economic mismanagement, inflation, and social challenges. Addressing these issues requires a commitment from both the government and society to take meaningful action toward reducing poverty and ensuring a better quality of life for all Argentines.
