In the long and turbulent story of Argentina's relationship with economic hardship, a new chapter has opened: poverty has climbed to 32.3 percent in the first half of 2026, reversing what had been one of President Javier Milei's most cited achievements. The arithmetic of daily survival has turned against ordinary Argentinians — wages rose, but the cost of necessities rose faster, leaving millions further from stability than they were six months ago. What began as a bold wager that austerity could cure inflation now confronts the older, harder question of whether price stability means anything
Argentina's poverty surges to 32% under Milei, threatening re-election hopes
Rising poverty and unemployment are directly impacting millions of Argentinians' ability to afford basic necessities, with extreme poverty affecting households unable to meet food needs.
Wages are losing ground to the cost of living
Mark
So the poverty rate went up 4.1 points in six months. That's a sharp move. What changed between the end of 2025 and mid-2026?
Mimi
The inflation gains that Milei had achieved started to lose their grip. Prices kept climbing—necessities costs jumped nearly 20 percent—while wages only rose 11.5 percent. The gap opened up again.
Luke
But we should note that poverty is still below where it was in early 2024, when it hit 53 percent. So in absolute terms, things are still better than Milei's first year. The question is whether the trend is reversing or just pausing.
Mark
And unemployment—7.9 percent is the highest since 2021. How much of the poverty rise is driven by job losses versus wage erosion?
Mimi
The data shows both are happening. More people are out of work, and those who are employed are seeing their real wages fall behind the cost of living. It's a double squeeze.
Luke
The source doesn't break down the contribution of each factor, though. We know the unemployment number and the wage number, but we don't know how much weight each carries in the poverty calculation.
Mark
What about the political angle? Milei was elected partly on the promise that austerity would work. Now his approval among poor voters has collapsed.
Mimi
His support among lower-income respondents dropped from 37 percent approval a year ago to below 30 percent now. Disapproval went from 57 to nearly 70 percent. For someone running for re-election in 2027, that's a serious problem.
Luke
That's one poll—AtlasIntel in September. It's worth noting, but it's a snapshot. We don't know if that trend is consistent across other polling firms or if it's moving in any particular direction month to month.
Mark
The Catholic University is predicting poverty could hit 35 percent by year's end. Is that a reliable forecast?
Mimi
The university is widely seen as an early indicator of official poverty trends, so it carries weight. But it's still an estimate, not a certainty. A lot depends on whether inflation stays controlled and whether job creation picks up.
Luke
Right. That's a forecast, not a fact. It could be wrong. The actual number will depend on economic conditions we can't fully predict.
The Pulse
- Poverty jumped 4.1 percentage points in just six months, erasing hard-won gains and pushing extreme poverty — households that cannot meet basic food needs — up to 7.5 percent.
- The cruelest pressure is in the gap: household incomes grew 11.5 percent, but the cost of necessities surged nearly 20 percent, meaning working Argentinians are falling behind even while earning more.
- Unemployment has reached 7.9 percent, its highest point since 2021, adding joblessness to the inflation squeeze and compounding the sense that the economy's recovery has stalled at the wrong altitude.
- Milei's political coalition is fracturing at its base — approval among lower-income voters has collapsed to below 30 percent, a dramatic fall from the working-class support that helped carry him to power.
- The Catholic University of Argentina projects poverty could reach 35 percent by year-end, a figure that would cast a long shadow over Milei's 2027 re-election campaign and the legacy of his entire economic experiment.
In the long and turbulent story of Argentina's relationship with economic hardship, a new chapter has opened: poverty has climbed to 32.3 percent in the first half of 2026, reversing what had been one of President Javier Milei's most cited achievements. The arithmetic of daily survival has turned against ordinary Argentinians — wages rose, but the cost of necessities rose faster, leaving millions further from stability than they were six months ago. What began as a bold wager that austerity could cure inflation now confronts the older, harder question of whether price stability means anything to a family that cannot afford to eat.
Argentina's national statistics agency reported Thursday that poverty reached 32.3 percent in the first half of 2026 — a rise of 4.1 percentage points from the previous six months and a significant blow to President Javier Milei's political narrative. Extreme poverty climbed to 7.5 percent, unemployment hit its highest level since 2021, and for those still employed, wages simply could not keep pace: incomes rose 11.5 percent while the cost of basic necessities jumped nearly 20 percent.
The reversal is especially pointed because poverty reduction had been the centerpiece of Milei's case for his free-market overhaul. When he took office in late 2023, his aggressive devaluation and spending cuts initially sent poverty soaring to nearly 53 percent. As inflation eased, the rate fell sharply, bottoming out at 28.2 percent by the end of 2025 — the lowest in nearly eight years. Milei held those numbers up as vindication. The current figures suggest the momentum has run out.
Analysts describe the situation as a plateau: the dramatic early gains from taming inflation have been absorbed, and what remains — real wage growth and sustained job creation — is proving far harder to deliver. Average salaries in real terms still sit below where they stood when Milei took office.
The political damage is already visible. A September poll found disapproval among lower-income Argentinians — those earning up to roughly $650 a month — had climbed to nearly 70 percent, up from 57 percent a year earlier. These are the voters who were central to Milei's original victory. With the Catholic University projecting poverty could reach 35 percent by year-end, and a re-election campaign approaching in 2027, Milei now faces the hardest version of his own argument: that an economy freed from inflation is still not an economy that feeds everyone.
Argentina's poverty rate climbed to 32.3 percent in the first half of 2026, according to figures released Thursday by the national statistics agency INDEC. The jump of 4.1 percentage points from the previous six months—up from 28.2 percent in the second half of 2025—represents a significant reversal for President Javier Milei, who has built much of his political case around the success of his free-market economic overhaul in reducing hardship.
The deterioration cuts across multiple measures of economic distress. Extreme poverty, defined as households unable to afford basic food needs, rose from 6.3 to 7.5 percent. Unemployment climbed to 7.9 percent in the second quarter, the highest level since 2021. For those still working, the math has turned brutal: household income per person rose 11.5 percent in the first six months of the year, but the cost of necessities used to calculate the poverty line jumped nearly 20 percent. Wages, in other words, are losing ground to the cost of living.
This moment carries particular weight because Milei's political fortunes have been tied directly to poverty reduction. When he took office in December 2023, his government's devaluation of the peso and aggressive spending cuts sent poverty soaring to nearly 53 percent in the first half of 2024. But as his austerity measures eased inflation, the rate fell sharply, reaching 28.2 percent by the end of 2025—the lowest point since early 2018. Milei repeatedly pointed to these numbers as proof his approach was working. The current reversal suggests that momentum has stalled.
Analysts describe what is happening as a plateau in the easier gains. Nicholas Watson, managing director for Latin America at consultancy Teneo, noted that while a modest increase in poverty would not undo the large decline achieved under Milei, it signals that "the easier part of the improvement has run its course." Real wage growth and job creation, he suggested, are now the critical variables. Yet average salaries remain below where they stood in real terms when Milei took office.
The Catholic University of Argentina, an institution widely watched as an early indicator of official poverty trends, estimates the rate could reach 35 percent by year's end. That projection looms over Milei's re-election prospects in 2027. Recent polling reveals the political damage. A September AtlasIntel survey found disapproval among lower-income respondents—those earning up to about $650 a month—had climbed to nearly 70 percent, while approval fell below 30 percent. A year earlier, disapproval stood at 57 percent and approval at 37 percent. The shift represents a dramatic erosion of support among voters who were central to Milei's previous election victory.
The numbers tell a story of an economy caught between competing pressures. Inflation has been tamed, but at a cost that has hollowed out purchasing power for millions. The government's spending cuts have stabilized prices, but they have also constrained job creation and wage growth. For lower-income Argentinians, the trade-off no longer feels like progress. As Milei prepares to campaign for a second term, he faces the prospect of defending an economic model that has delivered relief from runaway inflation but has failed to restore the real incomes that would make that relief felt in households struggling to afford food.
Notable Quotes
The easier part of the improvement has run its course, with further progress increasingly dependent on stronger job creation and real wage growth.— Nicholas Watson, managing director for Latin America at Teneo
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