Argentina’s poverty rate rebounds to 32.3% as inflation outpaces wage growth

Key points

• Poverty rate increased by 4.1 percentage points to 32.3% in the first half of 2026.
• Extreme poverty rose to 7.5% from 6.3% in the previous period.
• 44.5% of children aged 14 and under are classified as poor, with 10.8% in extreme poverty.
• Inflation rebounded at the start of 2026 before falling to 1.7% in August, the lowest in 14 months.
• Unemployment reached 7.9% in the second quarter of 2026, the highest since 2021.
• Approximately 30,000 companies have closed since President Milei took office.

Background

This development follows a period of significant economic adjustment under President Javier Milei, who took office with a mandate to reduce inflation and austerity. In the first two years of his mandate, the poverty rate nearly halved, falling from a peak of 52.9% in the first half of 2024 to 28.2% in the second half of 2025. This decline was primarily driven by a reduction in inflation, which had been a persistent issue in Argentina. However, recent data indicates a reversal of this trend, with poverty rates climbing again as incomes fail to keep pace with rising prices. The current situation reflects the complex interplay between inflation, employment, and economic policy in Argentina.

Why it matters

The rise in poverty rates in Argentina highlights the challenges faced by the country in balancing economic reforms with social welfare. The increase in poverty, particularly among children, underscores the impact of economic policies on vulnerable populations. The data also reflects the broader economic trends in the region, where job insecurity and informal work are significant drivers of poverty. The situation has implications for social stability and political support for the current administration, as well as for the effectiveness of economic reforms aimed at reducing inflation and promoting growth.

What to watch

The next steps will likely involve further analysis of the economic data and potential policy adjustments by the Argentine government. The government may need to address the issues of job insecurity and informal work to mitigate the rise in poverty. Additionally, the impact of opening the economy to foreign competition will need to be monitored, as it has led to job losses in manufacturing and retail. The government may also need to consider measures to support vulnerable populations, particularly children, who are most affected by the rise in poverty. The situation will also be influenced by global economic trends and the effectiveness of inflation control measures.