The Blubber

Poverty in Argentina has surged to its highest level since the aftermath of the 2001 financial crisis during the first half of this year, as President Javier Milei implemented a shock therapy program aimed at stabilizing the faltering economy.

Government data released Thursday revealed that 52.9% of Argentines were living below the poverty line in the first half of 2024, a sharp rise from 41.7% in the latter half of 2023. The spike is largely attributed to the government’s aggressive cost-cutting measures intended to control runaway inflation, which officials warn would have worsened without these interventions.

“This data starkly reflects the harsh reality that Argentine society is facing due to years of populism, which have brought disgrace and devastation to our country,” said presidential spokesman Manuel Adorni during a press briefing earlier on Thursday, in anticipation of the grim statistics.

The poverty rate has been exacerbated by annual inflation, which has soared to nearly 237%. This figure is calculated based on the cost of a basket of household goods in relation to average wages. The number of Argentines unable to make ends meet has more than doubled since the second half of 2017.

Although inflation has dropped from its peak of 289% in April, it remains far higher than President Milei’s bold target of 18% by December 2025. Monthly inflation, now at about 4%, fell from nearly 26% in December when Milei scrapped price controls on goods ranging from milk to phone bills, significantly devalued the peso, and allowed price increases to outpace pensions and public sector wages in the early months of his term.

Despite being in its sixth recession in a decade, Argentina’s economy is showing early signs of recovery. Wage growth has outpaced inflation for three consecutive months, and consumer spending and manufacturing have both seen gains. Economic activity rose by 1.7% in July, driven by growth in agriculture and mining.

However, opposition to the government’s austerity measures threatens to undermine the budget surpluses that have helped curb inflation. This month, Milei vetoed a bill that would have drastically increased pension spending, sparking violent protests outside Congress. Public universities are also planning a 24-hour strike next Wednesday, protesting the president’s promised veto of their budget increase.

Signs of increasing hardship are evident across the country. In Buenos Aires, more people can be seen begging outside grocery stores, rummaging through trash, and asking for donations of clothing. The government has responded by increasing funding for Argentina’s primary child support and food stamp programs, Adorni said.