According to the Indec, a “poor” in Argentina in early 2024 had less than 237,000 pesos (nearly $ 240). Local, or extreme poverty, under the threshold of a food basket of 107,000 pesos (109 dollars) has also increased sharply: 18.1% of the population. A jump of more than 6 points. The half-yearly Indec poverty survey is an extrapolation, applied to the total population, based on a statistical sample of 31 urban centers.
Javier Milei, “anarcho-capitalist” economist as he describes himself, has been pursuing a policy of drastic austerity for nine months, which has seen in particular a brutal devaluation of the peso by 54% at the end of 2023, and a drying of public expenditure, at Name of the “zero deficit” objective objective.
Recession
This “shock” therapy led to a marked deceleration of inflation, reduced to around 4% monthly (compared to 17% on average per month in 2023) and successive monthly budgetary balances, unprecedented for 15 years.
But it also led to a strong recession (-3.5% forecast at the end of 2024), a drop in activity and thousands of job losses: unemployment fell in one year from 6.2% to 7, 7%. A figure which says nothing, however, about the impact on the enormous informal sector (which represents more than 45% of total employment).
Viviana Quevedo is one of the faces of this poverty. This 57-year-old single mother, a housekeeper, lost her job in December, when her employers, with reduced purchasing power, reduced non-essential spending, like so many others in the middle class.
“My whole life I worked. But here I am in a very vulnerable situation. If I can’t find a job, I will be on the street at 30 of the month, “said Viviana to AFP, in a shopping street in Barrio Norte, wealthy district of Buenos Aires, tending CVs to passers -by.
This is because Viviana owes money to the home where she stays with her 13-year-old daughter, for 25,500 pesos ($26) a night. And his monthly allowance (equivalent to 85 dollars) does not allow him to cope. In the evenings, after picking up her daughter from school, they go to a soup kitchen.
“Bombs to deactivate”
Apart from a few exceptional semesters, the strong trend in Argentina has been an increase in poverty since 2017, regardless of the governments: the liberal Mauricio Macri (2015-2017) or the peronist Alberto Fernandez (2019-2023). But it had never reached 50% for twenty years, when the third economy of Latin America barely recovered from its traumatic “great crisis” – and enamelled with violence – of 2001.
The spokesperson for the Manuel Adorni presidency spoke on Thursday “the harsh reality” and the “bombs to be deactivated” left by the peronist government. “No one ever said it would be simple, that business wouldn’t suffer.” “The best way to fight poverty is to fight inflation,” he said, defending the austerity course.
The executive relies on a spectacular recovery (up to +5%) but only in 2025. “What to expect in the second half of?” Inflation has stabilized, but the key will be the real recovery of wages, particularly in the informal sector. If wages or job creation do not improve, we will not see a significant improvement in poverty,” predicts Santiago Coy, sociologist at the Center for Public Policy Research.
