Argentina's poverty rate climbed to 32.3 percent in the first half of 2026, partially erasing the significant gains made under President Javier Milei as household incomes failed to keep pace with rising prices. Official figures released on Thursday by the national statistics agency INDEC show the rate rose 4.1 percentage points compared to the second half of 2025, when it had stood at 28.2 percent. Extreme poverty — where families cannot afford even basic food needs — also increased, from 6.3 to 7.5 percent. Children were among the hardest hit, with 44.5 percent of Argentines aged 14 and under now classified as poor, and 10.8 percent as extremely poor.

The rise reflects a widening gap between earnings and the cost of living. While household income per person grew 11.5 percent in the first six months of the year, the cost of the basic goods and services used to calculate the poverty line rose by nearly 20 percent. Unemployment also worsened, reaching 7.9 percent in the second quarter — the highest level since 2021 — as the manufacturing and retail sectors shed jobs. Analysts note that the deeper problem is informal employment: when formal jobs disappear, many workers are forced into precarious, low-income activity such as street vending or waste collection. An estimated 30,000 companies have closed since Milei took office in December 2023.

The figures mark a significant setback for Milei, a self-described libertarian who came to power promising to revive Argentina's struggling economy through drastic austerity, deregulation, and openness to foreign competition. Poverty had surged to 52.9 percent in the first half of 2024 following a steep devaluation of the peso and sweeping spending cuts, but then fell sharply as those same measures brought inflation under control. Milei has claimed credit for lifting 14 million people out of poverty since the peak of the crisis. Even with the recent rise, the rate remains below that 2024 high.

Further deterioration may be ahead. Researchers at the Catholic University of Argentina (UCA), whose surveys are widely regarded as an early indicator of official poverty trends, estimate the rate could reach 35 percent by the end of the year. Analysts say the relatively easy gains from slowing inflation are losing momentum, and that sustained progress will now require stronger job creation and real wage growth — neither of which is yet materialising at scale. Average salaries in real terms remain below where they stood when Milei took office.

The economic hardship appears to be taking a political toll. Opinion polling suggests Milei's approval among lower-income Argentines has fallen sharply, with disapproval among those earning up to around $650 a month reaching nearly 70 percent in a September survey — up from 57 percent a year earlier. With a presidential election scheduled for 2027, the trend raises questions about whether Milei can retain the working-class support that was central to his rise to power.