The poverty rate in Argentina stood at 52.9% in the first half of the year, the highest rate since 2003, one of the worst effects of the cocktail of economic adjustment and high inflation that has characterized the first half year of Javier Milei’s government, which considers the dramatic social situation an “inheritance.”
According to a report released Thursday by the National Institute of Statistics and Census (Indec), the rate that measures the sector of the population that cannot cover its basic needs for food and services grew 11.2 percentage points compared to the second half of 2023 and jumped 12.8 points compared to the first half of last year.
The poverty rate of 52.9% recorded in the first half of the year is the highest since the first half of 2003, when the rate was 54% under a statistical series prior to the current one.
Meanwhile, the poverty rate in the first half of the year stood at 18.1%, 6.2 points higher than the previous half year and with an increase of 8.8 points in the interannual comparison, constituting the highest value since the second half of 2003.
The survey, whose results were released on Thursday, takes into account the standard of living in the 31 most populated urban centers in the country, which covers 29.6 million people, out of a total population in Argentina of about 47 million people.
If the urban poverty rate is extrapolated to the entire population, in Argentina there were 24.8 million poor people in the first half of the year, 5.4 million more than at the end of 2023, when Milei assumed the presidency of the country.
The number of homeless people, meanwhile, grew by 3 million in just half a year.
Since INDEC measures poverty based on the ability to access the basic basket, social indicators have a direct link with the evolution of household income and the cost of food and services.
In the first half of the year, the value of the basic basket of food and services, which marks the poverty line, increased by 76.1%, while the value of the food basket that marks the extreme poverty line grew by 63.4%.
In line with the severe adjustment implemented by Milei to try to stabilize Argentina’s macroeconomic imbalances, the economy of the South American country contracted by 3.4% in the first half of the year, while unemployment stood at 7.6% in the second quarter, with a jump of 1.4 points in interannual terms.
Labour market data also show the destruction of formal jobs, greater informal employment and more people working for themselves.
In these last two groups, incomes are lower and they are clearly losing the race against inflation, pushing thousands of people into poverty, even those with a job.
“The government inherited a disastrous situation. (…) Inflation means more poverty for the poorest. The best way to fight poverty is, first, to fight inflation,” said presidential spokesman Manuel Adorni at a press conference on Thursday.
The spokesman said that Milei, with his policies of fiscal and monetary discipline, managed to avoid hyperinflation, which, if it had occurred, would have raised the poverty rate to 95%.
“We would have entered a sea of absolute poverty if hyperinflation had not been avoided,” he said.
Those who do not understand macroeconomic arguments are the almost seven out of ten children under 14 years of age who are currently poor, nor the three out of ten in that population group who do not even cover their daily food needs.
The second most vulnerable group is young people: 60.7% of Argentines between 15 and 29 years old are poor and 21.2% are destitute.
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