By John Meyer, consultant in financial affairs – Eurasia Business News, April 6, 2025. Article No 1476.
Argentina has seen a significant reduction in poverty rates during President Javier Milei’s first year in office, following his implementation of sweeping free-market reforms. Official data from the National Institute of Statistics and Census (INDEC) shows that the poverty rate fell to 38.1% in the second half of 2024, down from 52.9% in the first half—a drop of nearly 15 percentage points.
The decline in poverty in Argentina for the second half of 2024 — from July to December — marks an improvement from the 41.7% that Milei’s left-wing populist predecessors delivered for the second half of 2023.
Key Drivers Behind the Poverty Reduction:
Inflation Control: Annual inflation fell dramatically from 289% in early 2024 to 66.9% by year-end, with monthly inflation dropping from 25.5% in December 2023 to just 2.4% by February 2025.
Economic Growth: Argentina’s GDP grew in the last two quarters, and the IMF projects a 5% growth for 2025. The OECD’s latest projection for Argentina’s economic growth in 2025 is 5.7%.
Reforms: Milei’s policies included slashing government spending, eliminating subsidies, deregulating markets, and devaluing the peso. These measures stabilized prices and improved household incomes, which rose by an average of 64.5% during the second half of 2024.
Impact on Extreme Poverty:
Extreme poverty dropped from 18.1% to 8.2%, meaning roughly 2.5 million people escaped conditions where they could not afford basic food necessities. This improvement reflects both falling inflation and targeted increases in social assistance programs like child allowances and food subsidies.
Challenges Persist:
Despite these achievements, challenges remain for Javier Milei.
Regional Disparities: Urban areas like Gran Resistencia report poverty rates exceeding 60%, highlighting uneven progress across the country.
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Criticism of Austerity: Experts argue that while some have emerged from poverty, others—especially those already impoverished—have seen their conditions worsen due to cuts in public services and subsidies.
Milei has framed these results as validation of his libertarian economic agenda, emphasizing fiscal discipline and market liberalization as key to long-term poverty alleviation.
However, sustaining these gains will require addressing structural inequalities and ensuring broader economic growth.
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© Copyright 2025 – Eurasia Business News. Article no. 1476.
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