Upon assuming office as president of Argentina, Javier Milei inherited a country in which 19.5 million people were poor and 5.4 million did not have enough income to even eat. The official figures for the second semester, published this Wednesday by the National Institute of Statistics and Censuses (Indec), show that poverty rose more than six points during the administration of the Peronist Alberto Fernández: from the 35.5% with which he took office at the end from 2019 to 41.7% four years later.
This notable deterioration, which reached its peak during the Covid-19 pandemic, helps to understand the resounding defeat of former Economy Minister Sergio Massa in the last presidential elections. Rampant inflation, which crescendoed until reaching 211% in 2023, shrank the salaries of Argentine workers. Not even the increase in state aid, the numerous price and exchange rate controls, and subsidies for public transport and household energy bills managed to prevent 3.5 million people from ceasing to be middle class and becoming poor. .
Many of the votes that Milei received came from the ranks of those impoverished by Peronism with the promise of curing the country of its chronic inflation. Three months later, although the situation has worsened even more, many maintain their support and remember that the then candidate warned that to achieve this, a harsh fiscal adjustment would be necessary to balance state accounts.
Unlike the economic crisis of the corralito of 2001-2002, the increase in poverty is now not associated with the lack of work but with the precariousness of the labor market. At the end of 2023, unemployment registered a rate of 5.7%, the lowest in almost two decades, but poverty still rose. It is because a large part of the new jobs created were informal and with very low salaries. Formal private employment, on the other hand, remained stagnant at around 30%.
Child poverty
Official figures reveal a worrying situation for the future of Argentina: the poorest are the children. Almost six out of every ten children under 15 years of age lived in a household with insufficient income to buy the basic basket, which includes food, clothing and spending on transportation, education, health and housing. Unicef warns that this dramatic situation could affect 70% of children if Milei maintains the budget cuts for children and adolescents that she has applied in the first months of her mandate.
Inflation has accelerated to 276% in Milei's first months in power and about half of Argentines live below the poverty line, according to unofficial estimates. Some measurements, such as that of the Argentine Catholic University, warn that this line has been exceeded and is closer to 60%.
The ultra president blames Fernández for the deterioration and assures that, if he had not corrected course, Argentina was on the path to hyperinflation and becoming “the largest slum in the world.” That scenario is not on the horizon, but neither is a recovery of the battered pockets of Argentines seen in the short term. Whether or not he manages to reduce the 41.7% of poor people with whom he started his mandate will be one of the data to judge the success of his management.
Subscribe here to the EL PAÍS América newsletter and receive all the key information on current events in the region.