Argentina's official poverty rate fell to 38.1% during President Javier Milei's first year in office, as reported by the National Statistics Institute (INDEC) on Monday. This reduction in poverty during the latter half of 2024 represents an improvement from the 41.7% rate recorded at the end of 2023, just prior to Milei taking office. Addressing the economic crisis resulting from years of reckless borrowing by previous administrations was a key focus of his campaign.

"These numbers indicate the shortcomings of past policies that left millions of Argentinians living in precarious conditions," Milei's office remarked following the report's release. “By promoting economic freedom and maintaining fiscal discipline, we aim to achieve sustainable poverty reduction.”

Nevertheless, numerous economists caution that the official figures do not accurately reflect the hardships faced by Argentinians under what has been labeled the most extreme austerity measures in the nation's history. Milei's extensive budget cuts have affected various sectors, including public kitchens, transportation fares, housing costs, and healthcare, significantly diminishing people's purchasing power.

"There is a significant disparity between the statistics and the reality on the streets," stated Tomás Raffo, an economist at CTA, Argentina's largest public sector labor union. "We've endured severe hardship. Many more people have fallen into poverty, and while some are beginning to escape it, those who were already poor have become even worse off."

During the first half of 2024—Milei's initial six months in office—INDEC reported a poverty rate of 53%. The newly released data shows a 14.8% decrease since then, alongside a notable deceleration in inflation. By February, Argentina’s annual inflation rate had decreased to 66.9%, down from 276.2% during the same period the previous year.

"This is a politically significant victory for the government, especially in a midterm election year," said Camilo Tiscornia, director of C&T Asesores Económicos, a consulting firm in Buenos Aires. He pointed out that this is the lowest poverty rate since the first half of 2022, indicating that government actions are beginning to yield results.

However, in the streets of Buenos Aires, the economic "progress" is difficult to observe. Increasing numbers of Argentinians are resorting to digging for food in garbage cans or peddling goods at traffic signals to survive. "I notice many more people selling their possessions and sleeping outdoors," said 46-year-old Lorena Jiménez, who sells stickers with two of her nine children. A former housekeeper who lost her job last year, Jiménez now spends most nights on the street with her children. Occasionally, they use their government allowance of $160 each month to pay for a night in a low-cost hotel.

"For me, the claims about reduced inflation and poverty are false," declared Viviana Suárez, a 48-year-old insurance agent from Buenos Aires. "How can that be true? I go to the supermarket and see the prices. You can't buy anything unless it's discounted."

An increasing number of economists are also questioning the accuracy of INDEC's inflation data. They contend that the Consumer Price Index (CPI) is based on a basket of basic goods from 2004, which skews the findings. "It's exceptionally outdated and fails to weigh heavily on the items whose prices have surged recently," Raffo noted.

For instance, CTA economists highlight that food now makes up a smaller portion of the typical household budget compared to two decades ago. The index does not consider modern expenses like digital subscriptions or current living costs. According to Raffo, it also does not reflect the rise in essential private services such as healthcare and education since Milei took office, nor the increase in rent prices in a recently deregulated housing market. "INDEC captures very little of what’s happening in reality."