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Argentina reports a drop in poverty under President Milei, but many say life is harder

Published: 01 Apr. 2025, 10:27

A protester holds an Argentine flag outside Congress during weekly demonstrations demanding better pensions for retirees and opposing austerity measures by Javier Milei's government, in Buenos Aires, Argentina, on March 26. [AP/YONHAP]

Argentina's poverty rate dropped to 38.1 percent in libertarian President Javier Milei's first year in office, the nation's official statistics agency reported on Monday, a closely watched measure reflecting the government's progress in wrestling down what had been among the world's highest inflation rates.

The decline in poverty for the second half of 2024 — from July to December — marks an improvement from the 41.7 percent that Milei’s left-wing populist predecessors delivered for the second half of 2023. Milei swept to office late that year with a mandate to reverse the country’s economic decline brought about by years of reckless borrowing.

“These figures reflect the failure of past policies, which plunged millions of Argentines into precarious conditions,” Milei’s office said as the government statistics agency, known as Indec, released its report. “The path of economic freedom and fiscal responsibility is the way to reduce poverty in the long term.”

But economists warn that the figure fails to capture the reality of ordinary people struggling to cope with the most radical austerity program in Argentina’s recent history. Milei’s blizzard of brutal cuts have hit everything from soup kitchens and bus fares to apartment rent and health care, eroding people’s purchasing power.

“There is a big gap between what the statistics say and what you feel on the streets,” said Tomas Raffo, an economist at Argentina's largest public sector workers union CTA. “We suffered a very strong blow where a lot more people went into poverty and now some of them have come out. ... But those who were poor before all this have gotten even poorer.”

In the first half of 2024 — the first six months of Milei’s presidency — Indec reported that Argentina’s poverty rate had soared to 53 percent. On Monday, Indec reported that the poverty rate for the preceding six months had slid by 14.8 percentage points to just over 38 percent, a knock-on effect of rapidly falling inflation.

Annual inflation plummeted to 66.9 percent last month compared to 276.2 percent a year earlier, according to Indec.

A woman with her child in her arms sells colored pencils on March 31. [AFP/YONHAP]

“Politically, this is a very important achievement for the government, especially in this year of midterm elections,” said Camilo Tiscornia, director of C&T Asesores Economicos, a consultancy in Buenos Aires, noting this marked the lowest poverty rate since the first half of 2022. “It shows that what the government is doing is starting to work.”

That bright picture can be difficult to make out on the streets of Buenos Aires, where a growing number of Argentines try to survive by mining dumpsters for sustenance and hawking their wares at traffic lights. This month, the capital was shaken by violent clashes between police and protesters demanding higher pensions.

“I see a lot more people selling things and sleeping in the street,” said Lorena Jimenez, a 46-year-old selling stickers with two of her nine children on Monday. A former house cleaner who lost her job last year, she and her kids now sleep most nights on the street, using the $160 they receive each month — part of a recently increased government stipend to support impoverished children — to pay for occasional hotel stays.

Questions over the rosy statistics have mounted in a country where past administrations were caught doctoring official data for political means. After a major scandal, Indec underwent a yearslong overhaul before regaining credibility in 2016.

“To me, this low inflation and poverty, it's a lie,” said Viviana Suarez, a 48-year-old insurance agent in Buenos Aires. “How does it make sense when you go to the supermarket and see the prices and realize you can't buy any food that's not on sale?"

A growing number of experts have voiced concern that, while perfectly orthodox, Indec’s inflation measure has become misleading partly because its consumer price index is based on a basket of basic goods from 2004. The government applies the inflation numbers to calculate the poverty rate.

“It's very outdated and gives little weight to the things with prices that have recently risen the most," said Raffo, the economist with CTA.

People pass by the National Institute of Statistics and Census of Argentina in Buenos Aires on March 31. [AFP/YONHAP]

For instance, CTA researchers say, food accounts today for a smaller share of an average household's budget than it did two decades ago. The index does not take into account digital subscriptions and other key expenses that have changed over time.

It also misses how critical private services like health care and education have become more expensive since Milei took office, and how residents are paying more for rent in a recently deregulated housing market, Raffo said.

He added: “Indec is capturing very little of what is really happening in the economy.”

AP