Argentina's Poverty Rate Jumps to 32.3%, Marking First Increase Under Milei

President Javier Milei has repeatedly told investors and voters that his sweeping austerity program is steadily lifting Argentines out of hardship, claiming recently that 14 million people have escaped poverty under his watch.

But official data released Thursday by the national statistics agency INDEC contradicts that narrative, showing the poverty rate jumped to 32.3% in the first half of 2026. The 4.1 percentage point increase from the 28.2% recorded at the end of 2025 marks the first reversal in poverty reduction since Milei took office, affecting nearly 15 million people nationwide.[1][3][4][5]

The INDEC report details that extreme poverty, or indigence, also climbed from 6.3% to 7.5% over the same six-month period. That shift means approximately 3.5 million Argentines now lack the income to afford a basic food basket, forcing many to skip meals or rely on community soup kitchens. The deterioration is particularly acute among the country's youth, with 44.5% of children under the age of 14 now living in impoverished households, while 10.8% face extreme poverty, threatening long-term developmental outcomes.[1][3][4][5]

The figures represent a structural setback for the libertarian administration, which had previously overseen a sharp decline in poverty. Following a massive currency devaluation and sweeping spending cuts, poverty had peaked at 52.9% in the first half of 2024, leaving a majority of the population unable to afford basic goods. As inflation cooled throughout 2025, the rate fell rapidly to an eight-year low of 28.2%, a trajectory Milei frequently cited as proof that his free-market overhaul and fiscal discipline were succeeding.[1][3][5]

The primary driver of the renewed hardship is a widening gap between wages and the cost of living. While average per capita family income rose by 11.5% during the first six months of 2026, the cost of the basic food basket surged by 21.4%, and the total basic basket grew by 19.6%. "Incomes in the studied period increased less than the total basic basket and the basic food basket, therefore, both the poverty and indigence rates also increased with respect to the previous semester," INDEC stated in its technical report.[1][3]

Economy Minister Luis Caputo acknowledged the statistical setback but emphasized that the current 32.3% rate remains significantly lower than the crisis levels seen in early 2024. However, the macroeconomic squeeze is increasingly visible in the daily lives of citizens across the country's 31 major urban centers. Unemployment ticked up to 7.9% in the second quarter of 2026, the highest level since 2021, while overall economic activity contracted by 2.9% in July, driven by a slump in manufacturing and retail.[1][3][5]

In lower-income neighborhoods on the outskirts of Buenos Aires and other major cities, residents are increasingly turning to cash-free barter clubs and short-term loans to secure basic groceries. Cooking oil, sugar, flour, and pasta have become highly sought-after items in these informal exchanges, often traded for used clothing or household goods as families exhaust their formal purchasing power. Social organizations report that soup kitchens are overflowing, reviving survival practices last seen during the country's severe economic crises of the early 2000s.[5]

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The reversal poses a direct political test for Milei ahead of next year's midterm elections, where his party hopes to consolidate legislative power. Recent surveys indicate that his approval rating among lower-income voters—defined as those earning up to $650 a month—has dropped below 30%, with nearly 70% expressing disapproval of his administration's performance. This marks a sharp decline from a year earlier, raising questions about whether the president can retain a working-class constituency that was central to his initial electoral victory.[2][5]

Looking ahead, independent analysts warn that the social deterioration may not have bottomed out, as the initial benefits of slowing inflation begin to fade. "Every quarter over the last four quarters, 400,000 to 450,000 people have fallen into poverty," said Agustín Salvia, director of the Argentine Social Debt Observatory at the Catholic University of Argentina (UCA).

The UCA observatory projects that the national poverty rate could reach 35% by the end of 2026 if job creation and real wage growth do not accelerate to offset the rising cost of utilities and transport.[5]