In President Javier Milei's inaugural year, Argentina's official poverty rate fell to 38.1%, as reported on Monday by the National Statistics Institute (INDEC). This reduction in poverty during the latter half of 2024 represents an improvement from 41.7% at the close of 2023, just prior to Milei taking office. His main campaign focus was to rectify the economic downturn Argentina faced, mainly attributed to years of reckless borrowing by previous administrations.

Milei’s office commented on the report, stating, “These figures highlight the shortcomings of former policies that forced millions of Argentinians into unstable living conditions. With economic freedom and fiscal responsibility, we aim for a sustainable reduction in poverty.”

Nevertheless, numerous economists caution that the official data may not accurately depict the real circumstances faced by Argentinians amid what has been termed the most drastic austerity measures in the nation's history. Milei's extensive cuts have affected a wide range of services, from public kitchens and transportation fares to housing and healthcare costs, severely diminishing people's purchasing power.

“There’s a significant disconnect between the statistics and the actual experience on the ground,” remarked Tomás Raffo, an economist with CTA, Argentina's largest public sector union. “We experienced a severe setback. Many more people fell into poverty, and while some are escaping it now, those who were already poor are now even worse off.”

During the first half of 2024—Milei's initial six months in office—INDEC noted a spike in the poverty rate to 53%. The newly released figures exhibit a 14.8% decrease since then, along with a marked deceleration in inflation. As of February, Argentina's annual inflation was reported at 66.9%, down from 276.2% in the same period the previous year.

“From a political standpoint, this is a significant triumph for the government, particularly in an election year,” noted Camilo Tiscornia, director of C&T Asesores Económicos, a Buenos Aires consulting firm. He highlighted that this is the lowest poverty rate recorded since the first half of 2022. “It demonstrates that government measures are beginning to take effect.”

However, in the streets of Buenos Aires, the supposed economic "improvement" is difficult to discern. An increasing number of Argentinians are scavenging for food in bins or selling items at traffic lights to survive. “I see many more people selling their possessions and sleeping on the streets,” shared Lorena Jiménez, 46, who sells stickers with two of her nine children. A former housekeeper who lost her job last year, Jiménez often sleeps on the streets with her kids. Occasionally, they use the monthly government stipend of $160 for a night in an inexpensive hotel.

“For me, the claims of lower inflation and poverty are false,” stated 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 discounted.”

An increasing number of economists are also beginning to challenge the credibility of INDEC’s inflation measures. They argue that the Consumer Price Index (CPI) relies on a basket of basic goods from 2004, skewing the results. “It’s incredibly outdated and doesn’t properly account for items whose prices have surged most recently,” Raffo observed.

For instance, CTA economists emphasize that food now comprises a smaller portion of the average household budget compared to two decades ago. The index does not consider contemporary expenses such as digital subscriptions or updated living costs. Raffo also pointed out that it fails to reflect the escalation in costs associated with essential private services like healthcare and education since Milei took office, as well as rising rental prices in a newly deregulated housing market. “INDEC captures very little of what’s truly happening.”