Milei’s Austerity Expected to Drive Half of Argentina into Poverty, Reports Reuters

BUENOS AIRES (Reuters) – Irma Casal, a 53-year-old resident of Buenos Aires, juggles three different jobs as a garbage recycler, cardboard collector, and bricklayer. Despite her hard work, like many Argentines facing increasing poverty levels, she struggles to make ends meet.

On Thursday, Argentina is set to release poverty statistics projected to indicate that the rate has surged beyond 50% during the initial six months of libertarian President Javier Milei’s administration. He has implemented stringent austerity measures in an effort to address the country’s substantial debt.

"Since this government came to power, jobs have diminished. We work twice as hard for less, and we must keep pushing forward," explained Casal, a mother of 14 and grandmother of 42, who lives in the economically challenged neighborhood of Villa Fiorito.

The forthcoming official data covering January to June will provide the first concrete indication of the increase in poverty rates since Milei assumed office in December. In the latter half of 2023, the official poverty rate was recorded at 41.7%.

While Milei’s budget cuts have garnered positive responses from markets and investors eager to stabilize the country’s finances after prolonged deficits, they have also resulted in a severe recession. However, there are emerging signs that the economy may be starting to stabilize.

The Catholic University of Argentina’s observatory estimates that the poverty rate spiked to 55.5% in the first quarter of the year, before slightly declining to 49.4% in the second quarter, yielding an average poverty rate of 52% for the first half of the year.

Agustin Salvia, director of the UCA’s Observatory, noted that Milei’s policies had a noticeable impact at the beginning of the year, with the shuttering of soup kitchens and a decrease in government subsidies. Nonetheless, he mentioned that there have been indications of recent improvement.

"If you examine the entire situation, it reveals a decline in the first quarter. That trend has begun to ease," he remarked.

Additionally, the Secretariat of Childhood, Adolescence, and Family informed Reuters that the government had expanded two welfare programs, the Universal Child Allowance and a Food Card initiative, providing crucial support to numerous families.