Argentina’s economic activity fell 2.9% in July from June after seasonal adjustment, and the poverty rate rose to 32.3% in the first half of 2026, official data showed on 24 September. The numbers land like a blunt report from the machinery of rule: output down, poverty up, and the people at the bottom paying for decisions made far above them.
Who Pays for the Slowdown
The July drop was the steepest monthly decline since September 2019, excluding the lockdown months of March and April 2020, and it wiped out June’s gain. Compared with July 2025, activity was down 1.4%. Analysts polled by Reuters had forecast 1.8% annual growth. INDEC’s smoother trend measure still rose 0.2%, but the index fell to its lowest level since March 2025, 4.1% below December, according to Cohen analyst Justina Gedikian. Activity has fallen in four of the first seven months of 2026.
INDEC’s revised series shows it was flat in January, fell 2.2% in February, rebounded 2.7% in March, fell 1.4% in April and 0.6% in May, then rose 0.3% in June before July’s 2.9% drop. That’s the rhythm of a system that keeps asking workers, tenants, and families to absorb the shock while the people in charge talk about temporary bumps.
Eight of 15 sectors shrank from a year earlier. Commerce fell 5.1% and manufacturing 4.6%, together taking 1.3 points off the annual figure. Construction fell 3.3% and financial services 3.0%. Earlier sector data had shown factory output down 5.0% and building activity down 4.6% from June. Mining and oil rose 8.4%, farming edged up 0.7%, and fishing, a small and volatile sector, jumped more than fivefold. Those gains added about 1 point, not enough to offset the rest.
What the Officials Say
Gonzalo Carrera of the consultancy Equilibra told Ámbito the data were worse than expected. He blamed a cheap dollar that hurts local producers, real wages that are not rising and credit that has not recovered. Farming had also stopped growing, he said. One-off factors, such as the football World Cup in June and July, may have played a smaller role.
Economy Minister Luis Caputo stressed the 1.7% growth so far this year and pointed to temporary shocks. He named gas shortages for industry, heavy rain and snow, and fewer hours worked during the World Cup. On 26 August, Caputo said, “We are attacking both supply and demand.” He said developers would get cheaper dollar financing, while mortgages would lift demand. In August, he announced easier dollar loans for companies and state pension-fund money to help banks offer mortgages.
That’s the familiar reform script: tweak credit, nudge demand, keep the structure intact, and hope the damage doesn’t show too loudly. But the numbers keep coming back with the same answer.
A technical recession means two quarters of decline in a row. The economy already shrank 0.6% in the second quarter from the first, INDEC’s GDP data show. Consultancy LCG estimates that August and September would each need growth of about 3% to avoid a second falling quarter. Carrera said even a full August rebound would not be enough if September grows less than 2%. Ammiel Pardo of the consultancy Aldazabal expects a better August, helped by the low July base. Milei, speaking in New York, said the economy would grow about 3% this year, “perhaps a little less”. Economists surveyed by the central bank cut their 2026 forecast to 2.1% in August, from 3.5% in December, Bloomberg reported.
Poverty Under the Numbers
The poverty rate rose to 32.3% of people in Argentina’s main cities in the first half of 2026, up from 28.2% six months earlier. Projected onto the whole country, that is about 15.6 million people, according to an Infobae estimate. Indigence, meaning people who cannot afford a basic food basket, rose from 6.3% to 7.5%.
INDEC measures poverty in 31 urban areas through its permanent household survey. There, 9.7 million people lived below the poverty line in the first half of the year. Measured by households rather than people, 24.4% were poor. The share of people in poverty was slightly above the 31.6% of early 2025, a change INDEC calls statistically insignificant. Indigence reached 5.6% of households and 7.5% of people, or 2.25 million in the surveyed areas. Projected nationally, that is about 3.6 million people. Infobae estimates that about 2.05 million more people nationwide fell below the line than in late 2025. In the surveyed areas alone, the count rose by about 1.26 million.
In August, a family of four in Greater Buenos Aires needed 1,605,497 pesos, or US$1,057, a month to stay above the poverty line. INDEC’s model family is two adults and two children aged 6 and 8. The food-only basket for that family cost 726,469 pesos, or US$478. A household earning less than that counts as indigent. Both baskets rose 2.6% in August alone. Over the past 12 months, the poverty-line basket rose 38.3%.
The main reason poverty rose again is that prices for essentials rose faster than incomes. Household income per person grew 11.5% in the first half, while the cost of the basket that defines the poverty line rose nearly 20%. The food basket, which sets the indigence line, rose even faster, at 21.4%. Officials told financial daily Ámbito that a jump in inflation in March and April drove the rise. The UCA says food and basic services have outpaced general prices since late 2025.
Jobs are another pressure. Unemployment rose to 7.9% in the second quarter, matching early 2025 as the highest level since 2021. Argentina has lost nearly 250,000 private-sector payroll jobs since just before Milei took office, Bloomberg reported. In an AtlasIntel poll for Bloomberg, 70% of Argentines described the job market as bad.
Children carry the heaviest load. Among those aged up to 14, 44.5% lived in poor households in the first half of the year. Among people aged 15 to 29, the rate was 36.9%. For those aged 65 and over, it was 14.8%. Among people aged 30 to 64, the rate was 28.8%. Poverty falls steadily with age in INDEC’s figures.
By region, the Northeast was worst, at 41.5%, and Patagonia best, at 28.4%. Greater Buenos Aires, home to nearly a third of Argentines, came in at 32.1%. Cuyo, the western wine region around Mendoza, stood at 36.7%. The Northwest was at 31.5% and the Pampas region at 30.3%.
Economy Minister Luis Caputo acknowledged the rise on X. He stressed that poverty is far below the 52.9% of the first half of 2024, and indigence below 18.1%. That 2024 peak followed a sharp devaluation and deep spending cuts early in Milei’s term. Poverty had been 41.7% in late 2023, when he took office. It then fell fast as inflation eased: to 38.1% in late 2024, 31.6% in early 2025 and 28.2% in late 2025. INDEC says the new rate is statistically unchanged from a year earlier.
Milei, speaking in New York the same day, played down talk of a slowdown. “We don’t see a problem with growth,” he told Bloomberg, forecasting growth of about 3% this year, “perhaps a little less”.
Agustín Salvia of the Catholic University of Argentina told Reuters poverty could reach about 35% by year-end. The UCA’s social-debt observatory often anticipates official trends. The government expects the rate to resume falling in the second half, Ámbito reported. The UCA says the fall in poverty has run its course and sees a structural core near 30% that slowing inflation alone cannot shift.