Argentina’s poverty rate climbed to 32.3% during the first half of 2026, according to official figures released Thursday by the national statistics agency, INDEC. The four-percentage-point increase from the 28.2% recorded in the second half of 2025 marks a notable setback for libertarian President Javier Milei as he approaches his reelection campaign next year.
INDEC Data Details Rising Indigence and Urban Poverty
The latest report from INDEC shows that extreme poverty, or indigence, increased from 6.3% to 7.5% across the surveyed regions. The government survey covers 30.1 million people living in 31 major urban areas out of Argentina’s total population of 46 million. Within those urban zones, roughly 9.7 million individuals now live below the poverty line, including 2.25 million people facing extreme poverty. Children under the age of 15 have been hit hardest, with nearly 45% living in impoverished households.
The agency reported that average per-capita household incomes grew by 11.5% over the six-month period. However, that growth failed to keep pace with the cost of the basic basket of goods used to calculate the poverty line, which jumped nearly 20%.
Economic Reversal Follows Short-Lived Decline
Thursday’s data contrasts with the downward trend Milei previously touted as proof that his free-market reforms were working. Following his inauguration in December 2023, Milei inherited triple-digit inflation and steep fiscal deficits from populist predecessors. He responded with an aggressive austerity agenda that slashed public spending and subsidies while tightening monetary policy.
Those initial measures caused poverty to spike to nearly 53% in the first half of 2024 as currency devaluation and spending cuts squeezed households. As the administration’s austerity drive helped tame inflation, the poverty rate fell rapidly, hitting an eight-year low of 28% in the second half of 2025. That momentum has since stalled amid rising unemployment and declining purchasing power, leaving average salaries below their real value when Milei took office.
Macroeconomic Stability Clashes with Labor Market Struggles
Despite achieving macroeconomic stability and fiscal surplus, the administration has struggled to spur job growth and economic expansion. Formal private-sector employment has dropped for 13 straight months, while economic activity contracted by 2.9% in July compared to the previous month, according to INDEC.
Political analyst Lucas Romero, who heads the polling firm Synopsis Consultores, noted that public patience with economic hardship is wearing thin. “Milei persuaded people that achieving a fiscal surplus required sacrifice, and that by now those sacrifices would be paying off,” Romero said. “Without tangible results — in economic activity, jobs and incomes — it will be difficult to persuade people to keep making sacrifices, especially if the government asks for further austerity.”
Critics argue that vulnerable populations have borne the brunt of the adjustment. A September analysis by the Argentine Institute of Fiscal Analysis found that cuts to pensions and social assistance accounted for nearly a quarter of the government’s inflation-adjusted spending reductions.
Economy Minister Luis Caputo acknowledged the negative data on social media but defended the administration’s broader trajectory. “While poverty and extreme poverty increased compared with the previous semester, both rates remain sharply lower than in the first half of 2024,” Caputo wrote.
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