Argentina’s poverty rate surged to 32.3% in the first half of 2026, encompassing an estimated 15.6 million people nationwide, as economic activity plummeted by 2.9% in July. This sharp decline, the steepest monthly fall since September 2019 outside of pandemic lockdowns, erased June’s modest gains. The official data, released on 24 September, confirms a deepening crisis for the nation's working class.
Who Pays
Indigence, the inability to afford a basic food basket, also climbed from 6.3% to 7.5%, affecting approximately 3.6 million people across the country. The primary driver of this escalating poverty was the relentless rise in prices for essential goods, which far outstripped income growth. Household income per person increased by 11.5% in the first half of the year, while the cost of the poverty-line basket surged by nearly 20%. The food basket, which defines indigence, rose even faster at 21.4%. This represents a systematic wage suppression.
Unemployment reached 7.9% in the second quarter of the same year, matching early 2025 as the highest level since 2021. Argentina has shed nearly 250,000 private-sector payroll jobs since President Milei assumed office. A recent AtlasIntel poll for Bloomberg revealed that 70% of Argentines describe the job market as "bad." Children bear the heaviest burden of this economic contraction; 44.5% of those aged up to 14 lived in poor households during the first half of the year. Among people aged 15 to 29, the rate was 36.9%, while for those aged 65 and over, it was 14.8%.
What Capital Did Next
While most sectors contracted, some areas of capital accumulation saw gains. Mining and oil production rose by 8.4%, farming edged up 0.7%, and the volatile fishing sector jumped more than fivefold. These gains, however, were insufficient to offset the widespread decline in other industries. Commerce fell 5.1%, manufacturing dropped 4.6%, construction decreased 3.3%, and financial services shrank 3.0% from a year earlier. These are sectors employing significant numbers of workers, demonstrating where the cuts are felt most acutely.
Economy Minister Luis Caputo acknowledged the rise in poverty, attributing it to "temporary shocks" such as gas shortages for industry, heavy rain and snow, and fewer hours worked during the World Cup. His proposed solutions, announced at an August 26 press conference, included easier dollar loans for companies and the allocation of state pension-fund money to help banks offer mortgages. These measures directly benefit developers and financial institutions, channeling collective resources to private capital.
President Milei, speaking in New York the same day the data was released, dismissed concerns about an economic slowdown. "We don’t see a problem with growth," he told Bloomberg, forecasting approximately 3% growth for the year, "perhaps a little less," despite the deepening crisis for the majority of the population.
The State's Role
The state's actions, under Milei's administration, have protected and subsidized capital. Gonzalo Carrera of the consultancy Equilibra noted that a "cheap dollar" policy hurts local producers, while real wages fail to rise and credit remains stagnant. The economy already shrank 0.6% in the second quarter of the same year from the first, according to INDEC’s GDP data, indicating a technical recession is imminent if August and September don't show significant growth. Economists surveyed by the central bank cut their 2026 forecast to 2.1% in August, from 3.5% in December.
Agustín Salvia of the Catholic University of Argentina warned Reuters that poverty could reach about 35% by year-end. He added that the fall in poverty has "run its course" and sees a "structural core near 30%" that slowing inflation alone cannot shift. Caputo himself stressed that current poverty is "far below the 52.9% of the first half of 2024," a peak that followed "a sharp devaluation and deep spending cuts early in Milei’s term," demonstrating how state policies directly inflict economic hardship.