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19 Feb, 2024 14:37

Poverty in Argentina soars to record high – study

‘Shock therapy’ reforms have propelled prices for basic goods higher and led to a sharp drop in purchasing power, a new study shows
Poverty in Argentina soars to record high – study

Poverty levels in Argentina hit a multiple-year high in January following the drastic economic reforms carried out by newly installed President Javier Milei, the Social Debt Observatory of the Catholic University of Argentina (UCA) said in its latest report released this past weekend.

According to the data, the share of people in poverty in the country surged to 57.4% last month, the highest since 2004, and up from 44.7% in the third quarter of 2023, prior to Milei taking office.

In what he called ‘shock therapy’ reforms, the new Argentinian leader has introduced a slew of measures aimed at stabilizing Argentina’s struggling economy, including devaluing the peso by 50% against the US dollar and hiking the key interest rate to 133%. The measures have led to a surge in consumer prices. According to official data released earlier this month, annual inflation in Argentina hit a three-decade high of 254% in January. This, in turn, caused household incomes to collapse and greatly diminished consumer purchasing power, exacerbating poverty levels.

The report noted that the greatest increase in poverty levels was observed among middle-class households that were not beneficiaries of social programs, as well as among low-skilled workers. According to the data, the percentage of Argentinians considered “destitute” surged to 15% in January, up from 9.6% in the third quarter of last year.

The head of the UCA’s Social Debt Observatory, Agustin Salvia, told La Nacion news outlet that he doesn’t expect poverty levels to grow much further, but warned that the situation will likely get worse before it gets better.

“In February and March the situation will tend to worsen, but poverty will find a ceiling of around 60%. There is an expectation that it will tend to improve in two or three months,” he predicted.

Milei reacted to the UCA report in a social media post on Saturday, pledging that more reforms would ease the crisis in the country.

“The true inheritance of the caste model: 6 out of every 10 Argentines are poor. The destruction of the last hundred years is unparalleled in Western history. Politicians have to understand that people voted for change and that we are going to give our lives to bring it about,” he wrote.

For more stories on economy & finance visit RT's business section

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