Argentine poverty rate climbs, in setback for Milei

BUENOS AIRES, (Argentina): Argentina's poverty rate increased to 32.3 per cent in the first half of 2026, partly erasing gains made under President Javier Milei as incomes fail to keep step with rising prices, official statistics showed Thursday.

The rate grew 4.1 points compared to the last half of 2025, the national statistics agency Indec said.

The rate of extreme poverty also shot up from 6.3 per cent to 7.5 per cent.

Children were the worst hit, with 44.5 per cent of Argentines aged 14 years and younger classified as poor, and 10.8 per cent as extremely poor.

Indec considers adults who cannot afford a basic basket of goods and services valued at around US$340 (RM1,400) to be poor.

It considers those who cannot afford a more basic food-only basket worth around US$150 (RM613) to be extremely poor.

The figures deal a setback to Milei, a free-market radical, who nearly halved the poverty rate during the first two years of his mandate, mainly by shrinking perennially high inflation.

The poverty rate has swung wildly since he came to power on a promise to revive the moribund economy through drastic austerity measures and deregulation.

From a high of 52.9 per cent in the first half of 2024, following his more-than-50-per cent devaluation of the peso, the rate fell to 28.2 percent in the second half of last year.

This year's increase coincided with a rebound in inflation at the start of the year before a new decline to 1.7 per cent in August, the lowest level in 14 months.

Eduardo Donza, a researcher at the Social Debt Observatory of the Argentine Catholic University (UCA), blamed job insecurity for high poverty rates in South America's second-largest economy.

The manufacturing and retail sectors have hemorrhaged jobs due to falling purchasing power and Milei's decision to throw Argentina open to foreign competition, leading to a surge in imports.

Some 30,000 companies have closed since he took office, and unemployment rose to 7.9 per cent in the second quarter of this year, the highest level since 2021.

Economists say that, more than unemployment, poverty is being driven by the high rate of informal work.

"The biggest problem is job insecurity, not unemployment, because when families are deprived...they have to invent a job, which can be collecting waste, street vending, selling food at the train station," said Donza.

Milei claims that he has lifted 14 million people out of poverty — an estimate based on the fall in poverty from the peak it hit after he became president. — AFP