Argentina’s poverty rate soared to almost 53% in the first half of the year, according to official data released on Thursday. This marks the first concrete evidence of the painful impact of libertarian President Javier Milei’s stringent austerity measures. The poverty rate has jumped significantly from 41.7% at the end of last year and more than doubled from 26% just seven years ago. This dramatic rise highlights the severe cost to ordinary Argentines of repeated economic crises that have plagued the nation.
Milei’s spending cuts, aimed at addressing a deep fiscal deficit, have caused significant short-term pain. The country is currently in a deep recession, and inflation remains in triple digits, although there are signs of potential improvement. The austerity measures have been cheered by markets and investors for helping to stabilize the state’s finances after years of deficits. However, these measures have also pushed the country into a recession, despite indications that the economy might be bottoming out.
Irma Casal, a 53-year-old resident of Buenos Aires, exemplifies the struggles faced by many Argentines. Working three shifts as a garbage recycler, cardboard collector, and bricklayer, she still finds it challenging to make ends meet. “Since this government came to power, jobs have dropped away,” Casal said. “We work twice as hard for less and we have to keep going.”
The Catholic University of Argentina’s (UCA) observatory had estimated that the poverty rate soared to 55.5% in the first quarter of the year before easing to 49.4% in the second quarter, resulting in an average of 52% for the first six months of the year. Agustin Salvia, director of the UCA’s Observatory, noted that there was a significant impact at the start of the year from Milei’s policies. However, he added that there had been signs of improvement recently. “If you look at the whole story, it shows a deterioration in the first quarter. That situation has since started to ease,” Salvia said.
Argentina’s government has cut some welfare programs and reduced support to soup kitchens. However, it argues that it has also expanded two key welfare programs: the Universal Child Allowance and a Food Card program, which provide direct support to families. Presidential spokesman Manuel Adorni acknowledged the severity of the situation, stating, “Any level of poverty is horrendous.” He blamed mismanagement by previous governments for leaving economic “bombs” that Milei was now trying to deactivate. “We are doing everything, everything so that this situation changes,” Adorni said during a daily press conference on Thursday.
The austerity measures have had a mixed reception. While they have been praised by financial markets for addressing fiscal imbalances, they have also led to widespread economic hardship. The government’s efforts to balance the budget have included cutting public spending, reducing subsidies, and implementing tax reforms. These measures have been necessary to secure international financial support and stabilize the economy. However, they have also resulted in job losses, reduced social services, and increased poverty.
The economic challenges facing Argentina are complex and multifaceted. The country has struggled with high inflation, a large fiscal deficit, and a heavy debt burden. These issues have been exacerbated by external factors such as global economic uncertainty and fluctuating commodity prices. The government’s austerity measures are part of a broader strategy to restore economic stability and promote sustainable growth. However, the short-term impact on ordinary Argentines has been severe.
To sum up, Argentina’s soaring poverty rate highlights the significant challenges facing the country as it implements austerity measures to address fiscal imbalances. While these measures have been necessary to stabilize the economy, they have also resulted in widespread economic hardship. The government’s efforts to balance the budget and promote sustainable growth must be carefully managed to ensure that the most vulnerable members of society are protected. As Argentina navigates these challenges, it will be crucial to find a balance between fiscal responsibility and social support.
