In President Javier Milei's first year in office, Argentina's official poverty rate fell to 38.1%, as reported by the National Statistics Institute (INDEC) on Monday. This decline in poverty during the latter half of 2024 demonstrates an improvement from the 41.7% rate recorded at the close of 2023, just prior to Milei taking office. His campaign focused on reversing the economic downturn that Argentina experienced, largely due to years of imprudent borrowing by previous administrations.

“These numbers illustrate the failure of former policies that forced millions of Argentinians into precarious living conditions,” stated Milei’s office with the report's release. “By promoting economic freedom and fiscal responsibility, we will realize long-term poverty reduction.”

Nevertheless, many economists caution that the official statistics do not accurately depict the conditions faced by Argentinians under what has been termed the most extreme austerity plan in the nation's history. Milei’s extensive budget cuts have affected a wide range of sectors—from public kitchens and transportation fares to housing and healthcare—significantly diminishing people's purchasing power.

“There’s a significant disparity between what the statistics indicate and the reality on the streets,” remarked Tomás Raffo, an economist at CTA, Argentina’s largest public sector workers’ union. “We endured a substantial setback. Many more people fell into poverty, and while some are now emerging from it, those who were poor before are now even worse off.”

In the first half of 2024—Milei’s initial six months in power—INDEC reported that the poverty rate had increased to 53%. The newly released data shows a 14.8% decrease since then, alongside a notable reduction in inflation. According to figures from February, Argentina’s annual inflation rate fell to 66.9%, in stark contrast to 276.2% during the same timeframe the previous year.

“Politically, this represents a significant victory for the government, especially in a midterm election year,” noted Camilo Tiscornia, director of C&T Asesores Económicos, a Buenos Aires-based consulting firm. He pointed out that this is the lowest poverty rate since the first half of 2022. “It indicates that the government’s actions are beginning to take effect.”

However, in the streets of Buenos Aires, the economic “improvement” is hard to perceive. Increasingly, Argentinians are forced to scavenge food from garbage bins or sell items at traffic lights just to survive. “I see many more people selling their possessions and sleeping on the streets,” shared Lorena Jiménez, 46, who sells stickers accompanied by two of her nine children. A former housekeeper who lost her job last year, Jiménez often sleeps on the streets with her children. Occasionally, they use their government stipend of $160 a month to pay for a night in a low-cost hotel.

“For me, the claim about lower inflation and poverty is untrue,” expressed Viviana Suárez, a 48-year-old insurance agent from Buenos Aires. “How does that make sense? I go to the supermarket and see the prices. You can’t buy anything unless it's on sale.”

An increasing number of economists are also beginning to doubt the reliability of INDEC’s inflation figures. They argue that the Consumer Price Index (CPI) is based on a basket of essential goods from 2004, which skews the findings. “It’s extremely outdated and places minimal emphasis on the items whose prices have escalated most recently,” Raffo highlighted.

For instance, CTA economists point out that food today occupies a smaller proportion of the average household budget than it did two decades ago. The index does not account for contemporary expenses such as digital subscriptions or updated living costs. Raffo argues that it also fails to reflect the rise in costs of essential private services like healthcare and education since Milei's presidency began, along with the increased rent prices in a newly deregulated housing market. “INDEC captures very little of what’s truly happening.”