The share of Argentines residing in poverty decreased from 38% to 32% during the initial half of this year. The figure has declined for two consecutive semesters following a peak of 53% in the first semester of 2024, a period during which the nation was grappling with a significant devaluation and various severe economic policies enacted after President Javier Milei assumed office. Milei has frequently asserted that the downturn illustrates how his significant reductions in public sector spending, which he notably likens to a chainsaw, have elevated 12 million individuals above the poverty line. Nevertheless, social organizations and poverty researchers caution that the statistics obscure a multifaceted reality; although poverty has decreased, authentic enhancements to living standards have been inconsistent.
Milei’s measures effectively reduced inflation, decreasing from 13% in November 2023, the final month of Alberto Fernández’s presidency, to 2% by August 2025. This contributes to poverty reduction as it ensures that money — and consequently salaries, pensions, and various income sources — retains its value. The INDEC establishes poverty criteria by assessing a household’s ability to purchase the essential basket of goods. Destitution, a more extreme category of poverty, is assessed based on whether a household’s earnings suffice to cover the basic food basket alone. In comparison to the latter half of 2024, total family income experienced a rise of 26%, while the basic food basket saw an increase of 13% and the total basic basket rose by 12%. However, the latest figures “over-represent decline in poverty,” according to the reports. Several factors contribute to this situation. The Observatory observed that when inflation and prices fluctuate significantly, the assessment of income poverty “tends to be less accurate.” Modifications to the INDEC’s questionnaire, coupled with a recent trend in which households are less likely to under-report their income, suggest an improved accuracy in capturing the true economic landscape. This development complicates direct comparisons with prior periods, as noted by both the Observatory and various sociologists.
Furthermore, the composition of the goods baskets continues to rely on data from a consumption habit survey conducted in 2004-5, leading to potential distortions in the data. The INDEC has committed to revising its basic basket figures prior to year-end, incorporating data from a more recent survey conducted in 2017-2018. This will also influence the methodology used for calculating inflation. “While acknowledging the observable improvements, it is important to highlight that official data tends to exaggerate the extent of social relief,” the Observatory stated. Poverty encompasses more than merely the count of households surpassing the breadline. The NGOs ACIJ and La Poderosa have observed that the advancement of integrating low-income neighborhoods, referred to as villas in Argentina, into urban areas across the nation has come to a standstill following years of development by both local and national authorities. “During 2024, there was worrying regression in this area, with the defunding of key policies and the fragmentation of actions at both national and local government levels, which interrupted the transformation processes,” the report stated. The report was generated through an analysis of nine neighborhoods across six provinces by the organizations involved. According to an index that evaluates factors such as pest presence, garbage accumulation, and proximity to pollution sources, it was determined that 90% of households are confronted with significant environmental risks.
Only 27% of homes were situated on paved streets, whereas 46% were located on dirt roads. In the analysis conducted, it was found that 50% of households lacked a formal water connection, with certain neighborhoods exhibiting figures as high as 95%. Simultaneously, 63% lacked adequate connection to the power grid. “41% of families rely on community kitchens, a figure that reaches 60% in some neighborhoods,” the report stated. The Milei administration has withdrawn funding from soup kitchens, alleging that the social organizations managing these facilities are corrupt. The government’s macroeconomic policy has influenced the circumstances for consumers and small businesses, as indicated by a report. Recent months have witnessed stratospheric interest rates aimed at stabilizing the exchange rate by diminishing the attractiveness of switching to the dollar. Nonetheless, this has resulted in higher borrowing costs, constraining access to credit for both consumers and small enterprises. The report indicated, “This may explain the fact that the use of credit cards for food purchases has fallen for the second consecutive month by one percentage point.” This situation has compelled households to seek financing — some through legitimate channels, others from predatory lenders.
“The social indicators in this report show the seriousness of this situation,” the IETSE survey observed. The study encompassed a sample size of 2,500 and, in contrast to the ACIJ and La Poderosa research. It was observed that 58% of families were unable to afford the basic food basket in August. Among those who were able to access it, 72% did so via state assistance. Fifty percent of households reported that they were forgoing one of their daily meals, typically dinner. “This also compromises the nutritional health and development capacity of families in the medium term,” the report cautioned.