Argentina is grappling with a deepening economic crisis, as the national statistics agency INDEC reported that the poverty rate has surged to 52.9% in the first half of 2024, a stark increase from 41.7% at the end of 2023. This alarming rise reflects the severe impact of soaring inflation and rising unemployment, which have hit low-income families particularly hard.
The economic turmoil has been exacerbated by the policies of President Javier Milei, who took office in December 2023. His administration implemented aggressive austerity measures, including a dramatic devaluation of the Argentine peso by over 50%, leading to an inflation rate that has skyrocketed to an annualized 250%, the highest in Latin America. The cost of essential goods and services has surged; food prices alone have increased by approximately 50%, leaving millions struggling to meet basic needs.
Families across Argentina are feeling the strain as purchasing power diminishes. Reports indicate that demand for food assistance at soup kitchens has surged, reflecting the dire circumstances faced by many households. A recent study from the Catholic University of Argentina estimated that poverty levels could be even higher, surpassing 57% earlier this year.
The economic situation is further complicated by rising unemployment rates, which are expected to climb as Milei’s austerity measures take effect. Economists warn that while some macroeconomic indicators may show improvement, such as a temporary budget surplus in January, these gains come at a significant social cost. The Institute of International Finance predicts a contraction of 7.8% in Argentina’s economy for the first quarter of 2024.
As inflation continues to erode living standards, public discontent is mounting. Labour unions have begun to mobilize against Milei’s policies, which many view as exacerbating economic hardship rather than alleviating it. The government faces increasing pressure to address the growing poverty crisis while navigating its ambitious fiscal reforms.
