Argentina's Poverty Rate Climbs to 32.3%, Reversing Milei-Era Decline

Argentina's poverty rate climbed to 32.3% in the first half of 2026, official figures released Thursday showed, marking a reversal of the decline that President Javier Milei had repeatedly cited as proof his free-market overhaul was working.

The national statistics agency INDEC reported that the share of Argentines living below the poverty line rose four percentage points from 28.2% in the second half of 2025. Extreme poverty, or indigence, increased from 6.3% to 7.5% over the same period.

The setback comes little more than a year before Milei seeks reelection. Poverty had surged to nearly 53% in the first half of 2024 after his government devalued the peso and imposed sweeping spending cuts, leaving many Argentines unable to afford a basic basket of goods. The rate then fell sharply as austerity helped tame inflation, reaching an eight-year low of 28% in the second half of 2025.

Thursday's report indicates that progress has stalled as unemployment edges higher and rising prices erode purchasing power. Average salaries remain below their real-terms level when Milei took office in December 2023. INDEC said average per-capita household income rose 11.5% from the previous six months, while the basic basket of goods used to set the poverty line increased nearly 20%.

About 9.7 million people across the 31 urban areas surveyed were living below the poverty line, including 2.25 million in extreme poverty. Nearly 45% of children under 15 were poor. The survey covers 30.1 million people in major urban areas, not Argentina's entire population of 46 million.

Milei inherited triple-digit inflation and chronic fiscal deficits from his predecessors and responded with one of the most aggressive austerity programs in Argentina's recent history, cutting public spending and subsidies while tightening monetary policy. His government argues that fiscal balance is essential to stabilizing the economy and laying the groundwork for better living standards.

But the macroeconomic stability achieved so far has yet to translate into stronger jobs and growth. Formal private-sector employment has fallen for 13 consecutive months, and economic activity dropped 2.9% in July from the previous month, INDEC reported Thursday.

"Milei persuaded people that achieving a fiscal surplus required sacrifice, and that by now those sacrifices would be paying off," said Lucas Romero, a political analyst who heads the polling firm Synopsis Consultores. "Without tangible results — in economic activity, jobs and incomes — it will be difficult to persuade people to keep making sacrifices, especially if the government asks for further austerity."

Critics say the poor have paid a high price for stability, with cuts to pensions and social assistance accounting for 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 on social media but stressed that poverty remained far below the levels recorded during Milei's first months in office.

"While poverty and extreme poverty increased compared with the previous semester, both rates remain sharply lower than in the first half of 2024," he wrote.