Argentina’s poverty rate increased to 32.3 percent during the first half of 2026, up from 28.2 percent in the second half of the previous year, according to official statistics released Thursday. The rise, driven by incomes failing to keep pace with rising prices, partially erases the progress made by President Javier Milei’s administration in reducing poverty.
The national statistics agency, Indec, reported that extreme poverty also climbed, moving from 6.3 percent to 7.5 percent over the same period. The agency defines poverty as the inability to afford a basic basket of goods and services valued at approximately $340, while extreme poverty is defined as not being able to afford a food-only basket worth around $150.
Children have been disproportionately affected by the economic downturn. Among Argentines aged 14 and under, 44.5 percent are now classified as living in poverty, with 10.8 percent considered extremely poor.
The new figures represent a significant setback for Milei, who rose to power on a platform of radical free-market reforms and austerity. During his first two years in office, the president credited his policies with nearly halving the poverty rate, largely by curbing Argentina’s historically high inflation. The poverty rate had peaked at 52.9 percent in the first half of 2024, following a devaluation of the peso that exceeded 50 percent, before falling to 28.2 percent by mid-2025.
Economic indicators suggest a volatile landscape this year. Inflation rebounded at the start of 2026 but subsequently declined to 1.7 percent in August, marking its lowest level in 14 months. Despite this recent cooling, the cumulative impact on household purchasing power has contributed to the upward trend in poverty.
Eduardo Donza, a researcher at the Social Debt Observatory of the Argentine Catholic University (UCA), attributed the sustained poverty levels primarily to job insecurity rather than outright unemployment. The labor market has been strained by a sharp decline in purchasing power and Milei’s decision to open Argentina to foreign competition, which led to a surge in imports.
Since Milei took office, approximately 30,000 companies have closed, and the manufacturing and retail sectors have experienced significant job losses. Unemployment reached 7.9 percent in the second quarter of this year, the highest figure since 2021. However, economists note that informal work is a larger driver of poverty than formal unemployment rates suggest.
“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,” Donza explained.
Milei maintains that his government has lifted 14 million people out of poverty, an estimate based on the overall reduction from the peak poverty levels recorded after he assumed the presidency. Nevertheless, the latest data underscores the ongoing challenges facing South America’s second-largest economy as it navigates the consequences of drastic deregulation and austerity measures.
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