Argentina’s poverty rate dropped to 38.1 percent of the population in the second half of last year – a decline of almost 15 points from the preceding half-year.
Extreme poverty, meanwhile, fell to 8.2 percent of the 47-million-strong population, down from 18.1 percent in the previous semester.
The data, released by the INDEC national statistics bureau on Monday, highlights a significant reversal in the national poverty rate, which had surged to 52.9 percent in the first six months of President Javier Milei’s government, following a sharp devaluation of the peso.
Overall, the number of those considered to be poor declined 14.8 percentage points from the middle to the end of last year – a massive advance despite the economy entering recession.
Poverty, which is measured by INDEC across 31 urban areas, is now at its lowest rate since the 39.2 percent recorded in the second half of 2022.
Despite that, 28.6 percent of households nationwide are below the poverty line, with 6.4 percent classified as in extreme poverty.
In terms of age groups, more than half (51.9 percent) of the people in Argentina live in households that fall below the poverty line.
The urban areas with the highest poverty rates were Gran Resistencia (60.8 percent), Santiago del Estero (47 percent), Formosa (46.2 percent), La Rioja (46 percent), and Gran Catamarca (45.8 percent).
According to INDEC, "compared to the first half of 2024, the incidence of poverty recorded a decline in both households and individuals, decreasing by 13.9 and 14.8 percentage points respectively. In the case of extreme poverty, there was a reduction of 7.2 percentage points among households and 9.9 percentage points among individuals.”
“At the regional level, a decline in poverty and extreme poverty was observed across all regions,” noted the bureau.
For the most part, the dramatic improvement marks the impact of falling inflation. Milei’s government has managed to reduce consumer price hikes considerably, falling from an annualised 211 percent in 2023 to 118 percent last year.
The drop in poverty is a “direct effect of the fight against inflation led by President Javier Milei, along with macroeconomic stability and the elimination of restrictions that for years limited the economic potential of Argentines,” cheered the Presidency in a statement posted on social media.
Since taking office in December 2023, Milei’s government has embarked upon a fierce austerity campaign, slashing public spending to record Argentina’s first annual surplus in 14 years.
The economy contracted 1.8 percent last year, less than anticipated, though cutbacks resulted in thousands of job losses due to the elimination or downsizing of state agencies and the halting of public works.
Public service tariffs were also deregulated, tripling in value, while the prices of rent and medicine, among others, were liberalised — leading to increases that disproportionately affected pensioners, the sector hardest hit by the adjustment.
Argentina’s economic contraction was reflected in consumption, which has now declined for 15 consecutive months.
Despite this, INDEC’s data confirms an improvement in poverty, which is measured by income.
According to the bureau’s methodology, “households classified as poor are those whose income is insufficient to purchase a basic basket of goods.”
In its latest report, INDEC stated that this basket was valued at 342,370 pesos (around US$313 at the official exchange rate) as of last February.
During a presentation to the Inter-American Development Bank (IDB), President Milei said that poverty "has already fallen to 36 percent due to the strong economic recovery.”
"We inherited a monthly poverty rate of 57 percent, and today it stands at 36 percent, meaning we have reduced poverty by 21 points," he said.
"This decline was driven by lower inflation, sustained increases in real wages and pensions, as well as real-term increases in the Universal Child Allowance [payment, AUH] and the Plan Alimentar" food assistance scheme, he argued.
– TIMES/AFP/PERFIL
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