By This Hour World News Desk

Argentina’s reported poverty rate rose to 32.3% in the first half of 2026, a reversal after a sharp improvement in the preceding year and a warning that lower inflation alone may no longer be enough to ease the strain on household budgets.

The figure, attributed to the national statistics agency INDEC, is 4.1 percentage points above the 28.2% reported for the second half of 2025. The increase matters not simply because it adds to the number of households falling below the official threshold, but because it comes after President Javier Milei had pointed to falling poverty as evidence that his economic programme was beginning to deliver social gains.

For Milei, the reported data present a more complicated picture than either a straightforward recovery or an unbroken deterioration. Poverty remains well below the level reported in the first half of 2024, early in his presidency, when it exceeded 50%. Yet the latest movement suggests that the rapid improvement recorded through 2025 has stalled and partly gone into reverse. The policy challenge now is whether incomes and employment can improve sufficiently to restore that momentum.

Household costs appear to be moving faster than incomes

The reported increase in poverty coincided with a widening gap between the rise in income per person and the cost of the basic goods and services used in calculating the poverty line. Household income per person reportedly increased 11.5% during the first six months of 2026. Over the same period, the cost of necessities used for the poverty calculation rose by nearly 20%.

Those figures do not establish the experience of every household, and they do not by themselves explain every change in the poverty count. But their direction is significant. When the cost of essentials rises more quickly than income, a household can lose purchasing power even while its cash earnings increase. Families close to the official threshold are especially exposed: a relatively small gap between pay growth and living costs can shift their measured status.

The reported poverty figure therefore captures more than a broad economic mood. It reflects whether household resources, assessed against a defined basket of necessities, are sufficient under the official methodology. The rise from 28.2% to 32.3% indicates that, on that measure, a larger share of Argentinians could not meet that benchmark in the first half of the year than in the latter half of 2025.

Extreme poverty also reportedly increased, to 7.5% from 6.3% over the same comparison period. That measure concerns households unable to afford basic food needs, making it a particularly stark sign of hardship. The 1.2-percentage-point increase is smaller than the rise in the overall poverty rate, but it points to deteriorating conditions among families with the least room to absorb higher costs or weaker earnings.

The reported numbers should not be read as proof that every consequence flows from a single government decision. Poverty is affected by prices, pay, work, household composition and the way official thresholds are calculated. Still, the combination of faster-rising necessities and an increase in both poverty measures gives a coherent account of why the earlier gains may have proved difficult to sustain.

Employment is becoming central to the next phase

The account of the data also points to a weaker labour market. Unemployment reportedly reached 7.9% in the second quarter of 2026, described as the highest level since 2021. A higher jobless rate can deepen pressure on incomes directly, while also reducing workers’ bargaining power and making it harder for wages to catch up with essential expenses.

That makes employment a central question for Milei’s government. The earlier fall in poverty was associated in the report with an easing of inflation after a period in which devaluation of the peso and sweeping spending cuts had severely reduced purchasing power. A deceleration in price growth can bring relief quickly when inflation has been eroding incomes. But once that initial relief has occurred, further reductions in poverty may require broader improvements in work and inflation-adjusted pay.

The available account says average salaries remain below their level in real terms at the time Milei took office in December 2023. If accurate, that helps explain why the return of poverty growth is politically and economically consequential. Lower inflation can slow the loss of purchasing power; it does not automatically restore purchasing power already lost. Nor does it guarantee stable jobs for people who are unemployed or working in precarious conditions.

Nicholas Watson of Teneo was cited as saying that a modest rise in poverty would not erase the larger decline seen under Milei, but could show that the easier phase of the improvement had ended. That assessment fits the reported sequence: an exceptionally high poverty level in 2024, a steep fall through 2025, then an increase during the first half of 2026.

It also draws a distinction that will matter in judging the government’s performance. The latest result does not return Argentina to the hardship reported at the start of Milei’s term. It does, however, challenge the idea that the initial decline can be treated as self-sustaining. A durable reduction would need to withstand renewed pressure from basic costs and any weakness in hiring.

A forecast of 35% is a warning, not an official result

The Catholic University of Argentina has reportedly estimated that poverty could reach 35% by the end of 2026. That projection has attracted attention because it would mean a further rise after the first-half reading. It must be distinguished carefully from the INDEC figure: it is a forecast, not an official measurement of year-end poverty.

A forecast can be useful as an indication of risk, especially when it draws on conditions visible before the next official count. It is not a settled outcome. The estimate could be borne out, missed or altered by changes in employment, household income, the cost of necessities or other factors affecting the underlying measure. Treating 35% as a confirmed rate would overstate what the reported information supports.

Even so, the prospect of another increase sharpens the stakes for policy. If costs continue to outpace household incomes, the problem implied by the first-half figures would become harder to frame as a temporary interruption. If pay gains strengthen, hiring improves or essential costs moderate, the trajectory could differ. The reported data do not establish which path Argentina will follow in the remainder of the year.

The political implications are equally uncertain, though the report links economic hardship to weakening support among lower-income voters. A September AtlasIntel survey reportedly found disapproval near 70% among respondents in that income group and approval below 30%. A year earlier, the corresponding figures were reported as 57% and 37%.

Polling is not an election result, and the available information does not provide details needed to evaluate the survey’s design, sample or margin of error. It nevertheless suggests a potential vulnerability for a president seeking re-election in 2027. Voters who had accepted short-term sacrifice in expectation of improvement may judge the government differently if poverty rises, jobs are scarcer and wages lag behind basic costs.

The reversal tests Milei’s economic argument

Milei was elected in 2023 and has made a free-market overhaul and austerity measures central to his presidency. His government’s case has rested in part on the claim that bringing down inflation and imposing fiscal discipline would create the conditions for recovery after Argentina’s long-running economic difficulties. The reported fall in poverty through the second half of 2025 gave that argument tangible force.

The first-half 2026 result complicates, rather than conclusively refutes, that argument. A rate of 32.3% remains below the reported level of more than 50% in the first half of 2024. Supporters can point to that larger comparison and argue that the country has still improved from the acute disruption that followed the early period of the administration. Critics can point to the latest reversal, the increase in extreme poverty and the unemployment figure as evidence that the gains have not reached or held for enough households.

Both readings rely on the same broad chronology but place emphasis on different periods. That is why the next official measurements will matter. They will help show whether the first-half rise was a short-lived setback or the beginning of a more persistent deterioration in living standards.

The social consequences are immediate regardless of the political debate. Poverty statistics represent households whose income is judged insufficient for the official basket of necessities, while extreme poverty concerns those unable to afford basic food needs. Changes of a few percentage points are therefore not abstract adjustments in a chart. They describe a shift in the resources available to families managing food, services and other essential expenses.

The material provided for this report is based on a single secondary account of official data, an outside forecast, analyst comment and polling. The report has not been independently corroborated. In particular, the underlying INDEC release, the university’s forecast methodology and the polling methodology were not independently reviewed here.

What follows will be measured less by the political claims surrounding the figures than by whether the pressure visible in the reported first-half data eases. Argentina’s government faces a demanding task: preserving any progress from lower inflation while ensuring that work and wages allow households to meet the cost of essentials. Until fuller and independently reviewed data are available, the reported rise should be treated as a serious but still source-limited indication of that challenge.

For further context on this subject, see Argentina’s left stages ‘March of Anger’ over Milei austerity measures.

Reporting notes

What is confirmed: The reported official figures show costs of necessities rising faster than per-person household income in the first half of 2026.

Why this matters: The reversal tests whether earlier poverty reductions under Milei can endure without stronger employment and real income growth.

What remains unclear: The underlying releases and methodologies were not independently reviewed; a 35% year-end figure is a forecast, not an official result. This report is based on one source and has not been independently corroborated.

Sources