(Buenos Aires) Poverty in Argentina reached 52.9% of the population in the first half of the year, a jump of more than 11 points over six months, covering the period of austerity led by ultraliberal President Javier Milei since December.
Out of a population of nearly 47 million Argentines, 52.9% lived below the poverty line in the first six months of the year, compared to 41.7% in the second half of 2023, according to figures from the Institute National Statistics (Indec), the first covering the Milei presidency.
According to Indec, a “poor person” in Argentina at the start of 2024 had less than 237,000 pesos (nearly CAN$323).
Destitution, or extreme poverty, below the threshold of a food basket of 107,000 pesos (C$147) has also increased significantly: 18.1% of the population. A jump of more than 6 points.
The half-yearly Indec poverty survey is an extrapolation, applied to the total population, based on a statistical sample of 31 urban centers.
Javier Milei, an “anarcho-capitalist” economist as he describes himself, has been leading a drastic austerity policy for nine months, which has seen in particular a brutal devaluation of the peso by 54% at the end of 2023, and a drying up of public spending, at name of the “zero deficit” budgetary objective.
Recession
This “shock” therapy led to a marked deceleration in inflation, reduced to around 4% monthly (compared to 17% on average per month in 2023) and successive monthly budget balances, unprecedented for 15 years.
But it also led to a strong recession (-3.5% forecast at the end of 2024), a drop in activity and thousands of job losses: unemployment fell in one year from 6.2% to 7, 7%. A figure which says nothing, however, about the impact on the enormous informal sector (which represents more than 45% of total employment).
Viviana Quevedo is one of the faces of this poverty. This 57-year-old single mother, a housekeeper, lost her job in December, when her employers, with reduced purchasing power, reduced non-essential spending, like so many others in the middle class.
“All my life I have worked. But here I am in a very vulnerable situation. If I don’t find work, I will be on the street by the 30th of the month,” Viviana explains to AFP, in a shopping street in Barrio Norte, a wealthy neighborhood in Buenos Aires, handing out CVs to passers-by.
This is because Viviana owes money to the home where she stays with her 13-year-old daughter, for 25,500 pesos ($35 CAN) per night. And his monthly allowance (equivalent to CAN$115) does not allow him to cope. In the evenings, after picking up her daughter from school, they go to a soup kitchen.
“Bombs to deactivate”
Apart from a few exceptional semesters, the strong trend in Argentina has been an increase in poverty since 2017, regardless of the governments: the liberal Mauricio Macri (2015-2017) or the peronist Alberto Fernandez (2019-2023).
But it had never reached 50% for around twenty years, when Latin America’s third largest economy was barely recovering from its traumatic – and violent – “Great Crisis” of 2001.
Presidential spokesperson Manuel Adorni spoke on Thursday of “the harsh reality” and the “bombs to be deactivated” left by the Peronist government. “No one ever said it would be simple, that business wouldn’t suffer.” “The best way to fight poverty is to fight inflation,” he insisted, defending the austerity course.
The executive is banking on a spectacular recovery (up to +5%) but only in 2025.
“What to expect in the second semester? Inflation has stabilized, but the key will be the real recovery of wages, particularly in the informal sector. If wages or job creation do not improve, we will not see a significant improvement in poverty,” predicts Santiago Coy, sociologist at the Center for Public Policy Research.