Poverty in Argentina falls sharply as prices cool under Milei

Poverty in Argentina dropped sharply as the disinflationary effects of President Javier Milei’s shock austerity programme took root.

About 38.1 percent of Argentines fell under the poverty line in the second half of last year, according to government data published Monday, down from the more than two-decade high of 52.9 percent between January and June 2024. 

Annual inflation of 66.9 percent drove the fall in Argentina’s poverty rate, which is calculated using a basket of household goods and average wages. That’s down from 289 percent last April, when prices were still reeling from Milei’s one-off 54-percent devaluation right after he took office in December 2023.

The latest poverty statistics follow improving economic news in the perennially troubled economy. Gross domestic product grew the last two quarters following a deep slump. Monthly inflation has fallen from 25.5 percent in December 2023 to 2.4 percent last month, and monthly wages have been steadily outpacing inflation since April.

In a radio interview last week, Milei said inflation would only dip below the two-percent range it has stayed in the last few prints come May or June because of the effects of recent political volatility. The country is engaged in intense talks with the International Monetary Fund over a new programme, but markets are growing antsy over the lack of clarity about the country’s future currency policy.