BUENOS AIRES — Argentina’s poverty rate has climbed for the first time since the country’s 2024 peak, and newer private estimates suggest the increase has continued into the second half of the year. The reversal comes as economic growth slows, unemployment sits at its highest level since 2021 and monthly inflation has stopped falling, complicating President Javier Milei’s argument that his economic overhaul is lifting living standards.

Argentina’s poverty rate rose to 32.3% in the first half of 2026 from 28.2% in the previous six months, according to the national statistics agency INDEC, as incomes lagged rising prices.

Extreme poverty rose from 6.3% to 7.5%. The rate had fallen from a peak of 52.9% in the first half of 2024, after Milei’s devaluation of the peso, to 28.2% in the second half of 2025. The current figure is also above the first half of 2025, when it stood at 31.6%.

The government points to the longer view. Economy Minister Luis Caputo said that although poverty and extreme poverty rose compared with the previous half-year, both remain sharply lower than in the first half of 2024.

INDEC’s next semiannual figure is not due until next year, but other measures have appeared since. The Catholic University of Argentina (UCA), using INDEC household survey microdata, estimated poverty at 34.4% in the second quarter of 2026 and extreme poverty at 8%, equal to about 16.5 million people nationwide.

The UCA found that among children under 5, poverty reached 39.9% and extreme poverty doubled from 5.4% to 10% in three months. A projection from the Torcuato Di Tella University put urban poverty at 32.6% for April through September.

The consultancy ExQuanti estimated that about 16.2 million people were poor in the third quarter, roughly 3.4 million more than a year earlier.

The main explanation is that costs have risen faster than incomes. The Di Tella report said the basic basket that sets the poverty line rose 36.1% year on year, while total household incomes rose only 27.2%.

The UCA’s social debt observatory linked the rise to weaker economic activity, the loss of registered jobs and a growth in informal and precarious work, along with food and other basket items rising faster than overall inflation.

INDEC reported unemployment of 7.9% in the second quarter, with informal workers making up 45.0% of the employed, up 1.0 point from a year earlier.

Economists cited by AFP say poverty is being driven more by informal work than by unemployment.

The Wider Economy

The International Monetary Fund cut its 2026 growth forecast for Argentina to 2.1% in October and now expects unemployment of 7.6% this year. One analysis of INDEC data reports GDP fell 0.6% quarter on quarter in the second quarter, the first contraction since 2024, and that the monthly activity index fell 2.9% in July.

In Buenos Aires province, activity fell 3.3% year on year in August and 104,000 jobs were lost, according to the provincial government, which linked the deterioration to national economic policy.

Inflation has stopped improving as prices have stayed near 2% a month for six months, and INDEC is due to publish the October figure today, with private forecasts clustered around 1.8% to 2%. The Central Bank’s survey of market expectations expects annual inflation of 30.4% at the end of the year.

Political Stakes

The reversal comes after Milei repeatedly touted falling poverty as evidence his free-market overhaul was working, and a little more than a year before he seeks reelection. Critics say the poor have paid a high price for stability, while the government stresses that poverty remains far below its 2024 level.

IMF staff have reached agreement on the third review of the country’s US$20 billion program, with a board decision expected in early December.

The next signals are the October inflation figure due today, INDEC’s second-half poverty data expected early next year, and whether wages recover against the cost of the basic basket. A sustained rise past 35%, as the UCA has warned is possible by year-end, would erase more of the gains the government has cited.