Argentina’s Poverty Rate Climbs to 32.3% in 2026
In the first half of 2026, Argentina’s poverty rate jumped to 32.3%, up from 28.2% in late 2025, according to INDEC. The rise reflects stagnant wages, higher prices, and a slowdown in the country’s austerity-driven economic recovery. While President Javier Milei’s reforms have curbed inflation, the…
By Felo News Desk · Published
Argentina’s poverty rate climbed to 32.3% in the first half of 2026, a four‑percentage‑point jump from the 28.2% recorded in the second half of 2025. The National Institute of Statistics and Census (INDEC) released the data on Thursday, showing that incomes have not kept pace with the rising cost of basic goods, a setback for President Javier Milei’s free‑market agenda.
From Record Poverty to a Reversal of Gains
When Mile I took office in December 2023, Argentina was grappling with triple‑digit inflation and a fiscal deficit that had been exacerbated by years of populist spending. His administration launched a sweeping austerity program that cut public spending, eliminated subsidies, and tightened monetary policy. The measures were designed to restore fiscal balance and lay the groundwork for long‑term growth.
The early months of Mile I’s presidency saw a dramatic rise in poverty, with nearly 53% of the population living below the poverty line in the first half of 2024. The sharp increase was largely attributed to the peso’s devaluation and the removal of subsidies that had kept the price of a basic basket of goods affordable. However, as inflation began to subside, the poverty rate fell rapidly. By the second half of 2025, it had dropped to an eight‑year low of 28%.
Current Numbers and What They Mean
INDEC’s latest figures reveal that the poverty rate has rebounded. Extreme poverty—defined as living on less than a few dollars a day—rose from 6.3% to 7.5%. The number of people living in poverty across the 31 urban areas surveyed reached 9.7 million, with 2.25 million in extreme poverty. Almost half of children under 15 now live in poverty.
While the overall population covered by the survey is 30.1 million—representing the urban core of Argentina’s 46 million residents—these numbers still paint a stark picture. Average per‑capita household income increased by 11.5% over the previous six months, but the basic basket used to set the poverty line grew by nearly 20%. In real terms, wages have not improved enough to offset the higher cost of living.
Why the Austerity Gains Are Losing Momentum
Several factors are contributing to the slowdown. Unemployment has edged higher, and formal private‑sector employment has fallen for 13 consecutive months. Economic activity in July fell 2.9% from the previous month, according to INDEC. These trends suggest that the macroeconomic stability Mile I has achieved has not yet translated into job creation or higher real incomes.
Critics argue that the austerity measures have disproportionately hurt the poor. Cuts to pensions and social assistance account for nearly a quarter of the government’s inflation‑adjusted spending cuts, according to a September analysis by the Argentine Institute of Fiscal Analysis. The social safety net has been eroded, leaving many families unable to cope with the rising cost of food, housing, and utilities.
Political Implications Ahead of the 2027 Election
With a year left before the 2027 presidential election, Mile I’s approval hinges on the perception that his reforms are paying off. “Mile I persuaded people that achieving a fiscal surplus required sacrifice, and that by now those sacrifices would be paying off,” said Lucas Romero, a political analyst at Synopsis Consultores. “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.”
Economy Minister Luis Caputo acknowledged the rise in poverty on social media but emphasized that the levels remain far below those recorded in the first half of 2024. He added that the government’s focus on fiscal stability is essential for long‑term prosperity, even if short‑term pain continues.
What Comes Next?
INDEC will continue to monitor poverty and income trends as Mile I’s administration seeks to balance fiscal consolidation with social protection. The government may need to adjust its policy mix to address the growing gap between wages and prices, especially if the upcoming election brings new political pressures.
For now, the data underscore the challenge of turning macroeconomic stability into tangible improvements for ordinary Argentines. The next few months will be critical in determining whether Mile I can maintain public support while navigating the delicate balance between austerity and social welfare.
Key facts
- Poverty rate rose to 32.3% in H1 2026, up from 28.2% in H2 2025
- Extreme poverty increased from 6.3% to 7.5%
- Average wages grew 11.5% but price basket rose 20%
- Unemployment and formal employment have fallen for 13 months
- Austerity cuts have hit pensions and social assistance
- Economy Minister says poverty still lower than 2024 levels
Why it matters
The rise in poverty signals that Argentina’s economic reforms, while successful in reducing inflation, have not yet improved living standards for many citizens. This trend could influence public opinion and electoral outcomes in the country’s upcoming election.
Frequently asked questions
What caused the rise in Argentina’s poverty rate in 2026?
Stagnant wages, higher prices for basic goods, and a slowdown in the country’s austerity‑driven economic recovery have contributed to the rise.
How many people live in extreme poverty in Argentina?
According to INDEC, 2.25 million people in the 31 urban areas surveyed are living in extreme poverty.
Sources
- [1] independent.co.uk — originally reported as “Argentina’s poverty rate rises above 30% under President Milei, reversing recent decline”
