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The share of Argentina’s population living in poverty fell sharply in the second half of 2024, the country’s national statistics agency announced on Monday, in a boost for libertarian President Javier Milei in his battle against high inflation.
The poverty rate fell to 38 per cent in the second half of last year — the lowest since 2022 — down from 53 per cent in the first half of the year, when triple-digit annual inflation left a majority of people unable to afford a basket of basic goods.
Milei, who took office in December 2023, implemented a “shock therapy” package including a sharp devaluation of the peso, sweeping spending cuts and the removal of price caps, unleashing price pressures that had been building after the previous left-leaning government printed billions of dollars to fund spending.
The president’s office said Monday’s poverty statistics “reflect the failure of past policies, which sunk millions of Argentines into [poverty] even as they claimed that they were helping the poor”.
“The current administration is demonstrating that the path of economic freedom and fiscal responsibility is the way to reduce poverty in the long term,” it added.
Marcelo J. García, America’s director for the geopolitical risk consultancy Horizon Engage, said the figure was “a good number” for the government. But he warned the “real challenge” would be to keep poverty decreasing as Milei begins to loosen Argentina’s strict currency controls, which may lead to volatility in the peso and spikes in price pressures.
“The poverty line in Argentina is very sensitive to inflation, and there is a big question mark about how the economic programme will manage to continue to slow down prices given the increasing pressure on the peso,” García said.
Argentina’s economy emerged from a recession in the third quarter of 2024, and the IMF has projected it will grow by 5 per cent in 2025. Meanwhile, annual inflation has fallen from its peak last April of 289 per cent to 66 per cent this February.
But millions of Argentines are still feeling economic pain. Monday’s figures show 11.3mn were living in poverty in late 2024, including 52 per cent under the age of 14.
Milei’s critics say the poor have paid a high price for Argentina’s economic stability, with a big chunk of the president’s fiscal savings last year coming from cuts to pensions and social programmes.
But analysts say pensions and private sector incomes have recovered to about late 2023 levels in recent months.
Milei faces a number of pressing economic challenges, however, including sealing an IMF deal to replenish Argentina’s scarce foreign exchange reserves, which he needs to keep the peso stable and repay the nation’s debts.
Uncertainty about the conditions of the IMF deal, which Milei has said is worth $20bn and will be delivered in April, has unnerved investors this month, with the peso’s parallel exchange rate weakening 8 per cent.
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