Argentina's Poverty Rate Surges as Austerity Bites Amid Economic Crisis

Argentina's poverty rate surged to 52% in the first half of the year, reflecting the harsh effects of President Javier Milei's austerity measures aimed at addressing the country’s fiscal deficit. This represents a sharp increase from 41.7% at the end of last year and is more than double the 26% rate from seven years ago. The economic crisis, exacerbated by spending cuts, has significantly impacted the population.

Investors have applauded Milei's policies, which include reducing government spending and cutting welfare programs, for stabilizing state finances. However, these measures have also driven Argentina into a deep recession, with inflation still in triple digits. According to the Catholic University of Argentina (UCA), the poverty rate hit a high of 55.5% in the first quarter before easing to 49.4% in the second quarter, resulting in an overall rate of 52% for the first half of the year.

The austerity measures, which have seen cuts to support programs like soup kitchens, have left many Argentinians struggling. Unemployment remains high despite the expansion of two key welfare programs—the Universal Child Allowance and a Food Card. Irma Casal, a worker in Buenos Aires, typifies the hardship many face, working multiple jobs but still finding it difficult to make ends meet.

What Does This Mean for Me?

Milei’s administration blames previous governments for the economic difficulties, asserting that the current reforms are necessary to mitigate long-term fiscal damage. While signs of economic stabilization are emerging, the social cost of these policies remains severe as Argentina navigates one of its toughest economic periods in recent history.