Argentina poverty levels slide, though many still feel the pinch

By Miguel Lo Bianco and Juan Carlos Bustamante

BUENOS AIRES (Reuters) -Argentina's poverty rate fell sharply in the second half of 2024, the government's INDEC statistics agency said on Monday, a turnaround for libertarian President Javier Milei after his shock austerity had initially plunged millions into hardship.

The 38.1% rate was down from an eye-watering 52.9% in the first half of last year after Milei took office in late 2023, devaluing the peso currency and taking what he calls a "chainsaw" to state spending to overturn a deep fiscal deficit.

The slide in poverty marks a boost for Milei ahead of midterm elections this year. His pro-market policies won over investors, but rebooting the real economy is the acid test with voters amid rising protests over a cost-of-living crisis.

The poverty rate - helped by inflation coming down from near 300% to under 70% - also came in under the level of 41.7% at the end of the previous center-left Peronist government, which Milei defeated in a shock election at the ballot.

"The path of economic freedom and fiscal responsibility is the way to reduce poverty in the long term," the government said in a statement after the poverty data was published.

There are still some 11.3 million people in poverty, INDEC said, with 2.5 million of those in severe poverty.

Some Argentines said that despite the slide in the headline figure, they still felt the pain, with some having to find thrown-away food to get by or taking informal low-salary jobs.

"There are more and more people rummaging through dumpsters here, foraging," said Jorge Silvero, a Buenos Aires resident who survives by scavenging in the suburb of Tapiales.

"People coming to look and take a small bag of bagallo, as we say, some vegetables home. They have enough to eat, at least to take home. But there is a terrible hunger."

POVERTY CRISIS: WORST MOMENT OVER?

There is hope that the worst hardship might be over.

"Now we have price stability, or at least macroeconomic stability and much lower inflation," Agustin Salvia, director of the Argentina Social Debt Observatory at the Catholic University of Argentina, told Reuters.

He warned, however, that income levels for workers, retirees, and pensioners remained below what they were at the end of 2023, and that many people were taking on "more precarious, subsistence jobs, and informal work."

Jose Rolando Ailan, who was looking for discarded fruits and vegetables outside another market in Tapiales, said significantly more people were out searching for food to get by.

"I've never seen people coming here to scavenge like they are now," he said. "It makes me feel sad to see men and women coming here with their children just to scrape by."

(Reporting by Miguel Lo Bianco and Juan Bustamante; Additional Reporting by Aida Pelaez-Fernandez; Writing by Nicolas Misculin and Natalia Siniawski; Editing by Adam Jourdan and Bill Berkrot)