Argentina's poverty rate jumped to 32.3% in the first half of 2026, official data released Thursday showed, marking the first significant reversal of President Javier Milei's signature economic turnaround and landing just over a year before he seeks reelection.

The figure, published by national statistics agency INDEC and reported by the Associated Press, is up four full percentage points from 28.2% in the second half of 2025. Extreme poverty, or indigence, climbed from 6.3% to 7.5%. Roughly 9.7 million people across the 31 urban areas INDEC surveys were living below the poverty line, including 2.25 million in extreme poverty, with nearly 45% of children under 15 classified as poor.

Wages losing the race against prices

The squeeze came down to simple arithmetic: average household income rose 11.5% over the six-month period, but the basic basket of goods used to draw the poverty line rose almost 20%. Real wages remain below where they stood in December 2023, when Milei took office promising "shock therapy" for an economy racked by triple-digit inflation. Formal private-sector employment has now declined for 13 straight months, and economic activity contracted 2.9% in July alone, according to the Buenos Aires Herald's breakdown of the INDEC figures, which also found poverty hitting 41% in the country's northeast, the worst of any region.

The numbers complicate the story Milei has told since slashing subsidies, gutting the public payroll and devaluing the peso soon after taking office. Poverty had spiked to nearly 53% in early 2024 as those measures bit, then fell steadily as inflation cooled — a decline Milei and his allies pointed to as vindication of the pain. Thursday's data is the first sign that progress has stalled.

"Milei persuaded people that achieving a fiscal surplus required sacrifice, and that by now those sacrifices would be paying off."

That warning came from political analyst Lucas Romero. Economy Minister Luis Caputo acknowledged the uptick but insisted both poverty and indigence remain "sharply lower" than the 2024 peak, framing the report as noise in a longer recovery rather than a trend reversal.

Markets and voters may see it differently. Milei is seeking reelection just over a year from now, and economists cited by local outlets are already warning that a fresh recession could be "just around the corner" if formal job losses and weak consumption continue. For a president who built his entire brand on fixing Argentina's economy by force of will, a rising poverty count is the one number he cannot spin away with a chainsaw metaphor.