BUENOS AIRES — Argentina’s poverty rate has fallen sharply since President Javier Milei took office, but the latest official data show that progress has stalled. INDEC, the national statistics agency, reported that 32.3% of people in the urban areas it surveys were poor in the first half of 2026, up from 28.2% in the second half of 2025.

It is the first increase since poverty peaked in early 2024.

Poverty hit 52.9% in the first half of 2024, after Milei’s peso devaluation and spending cuts sent prices sharply higher in his first months. It then fell for three straight semesters: First half of 2024: 52.9%; Second half of 2024: 38.1%; First half of 2025: 31.6%; Second half of 2025: 28.2%, reported as the lowest since early 2018; First half of 2026: 32.3%.

Extreme poverty, or indigence, followed the same path: 18.1% in early 2024, 6.3% in late 2025 and 7.5% now. Even after the rebound, poverty is more than 20 points below its peak and about nine points below the 41.7% recorded in the second half of 2023.

Compared with the first half of 2025, poverty is up 0.7 points and indigence up 0.6 points, from 6.9% to 7.5%. Against the second half of 2025, the rise is sharper: 4.1 points for poverty and 1.2 for indigence.

About 9.7 million people in the surveyed urban areas are now poor, roughly 1.2 million more than the previous semester. Some 24.4% of households are in poverty, up from 21%, and 5.6% are in extreme poverty.

The average poor household’s income was 35.9% below the cost of the basic basket, a wider gap than in the prior semester.

The burden varies by region. The Northeast has the highest poverty rate at 41.5% and the highest indigence at 10.5%, while Patagonia has the lowest poverty at 28.4%, while Greater Buenos Aires stands at 32.1%. Children are hit hardest, with 44.5% of those aged 14 and under living in poverty.

Why the Increase?

INDEC attributes the increase to incomes lagging prices. Per-person household income rose 11.5%, while the total basket used to set the poverty line rose 19.6% and the food basket 21.4%.

The labor market has also softened. Unemployment reached 7.9% in the second quarter, up from 7.6% a year earlier. Informal employment rose to 45% of workers, about a point higher than a year ago.

Inflation has complicated the picture. Monthly inflation was 1.9% in September, up from 1.7% in August, which had been the lowest in 14 months. It is running at 33.4% over the past 12 months and 23.6% for the year to date.

The Government’s Response

Economy Minister Luis Caputo acknowledged the increase but pointed to the longer trend. In a post on X, he said both rates had fallen sharply since the first half of 2024, with poverty down from 52.9% to 32.3% and indigence from 18.1% to 7.5%. Milei has repeatedly cited falling poverty as proof his reforms are working.

Private estimates pointed to the rise before the official numbers arrived. The Catholic University of Argentina’s social debt observatory put first-quarter poverty at about 30% and warned the second quarter “should be even higher.” The university has since said poverty could reach 35% by year’s end. It is widely seen as an early indicator of official trends.

Analysts say the easy part of the improvement is over. “The easier part of the improvement has run its course,” said Nicholas Watson of Teneo, who added that a modest rise would not erase the earlier decline. Further progress, forecasters say, depends on job creation and real wage growth, both of which have struggled.

Milei will seek re-election in 2027, and the figures matter politically. A September AtlasIntel poll found that disapproval among lower-income respondents was near 70%, with approval below 30%. A year earlier, those figures were 57% and 37%.

The data do not erase the drop since 2024. They do show that the drop is no longer continuing, and that Milei’s best argument now depends on how far the economy can still lift incomes.