Poverty in Argentina soars to over 50% as Milei's austerity measures hit hard

24 pointsposted 16 hours ago
by fpierfed
(theguardian.com)

12 Comments

rogerrogerr

16 hours ago

Is it possible that things have been this bad, and Milei’s policy changes have slowed down the economic decline enough that the poverty line is more accurate?

I’m not an economist, just an engineer. My intuition is that when a system is in freefall, any recovery will cause some metrics to look really bad for a while.

Like when a plane is in a dive, your first steps are to idle the engine, push forward to unload the wings. Then you level the wings and pull up. Is this article saying “Not only are we in a dive, the engine power is going down!”?

nateglims

15 hours ago

I suspect how Milei would frame it is he's focusing on the currency crisis and deficit. If/when that is under control, Argentina will be more attractive to foreign capital or some other mechanism of creating better paying jobs which will alleviate poverty.

I don't think the people quoted in the article are saying the plane is going down, but rather the policies will probably get reversed due to politics.

criticalfault

15 hours ago

With the feeling people dislike milei, and risking down votes, could this be 'getting worse before it gets better'? As said in the following video:

https://www.youtube.com/watch?v=18RTtDVghfw

As someone not really too informed about argentinian politics or economy, but knowing stuff only from news reports - isn't milei doing really everything that macroeconomists said needs to be done?

First of which was to reduce the public sector and subsidies?

https://apnews.com/article/milei-economy-union-protests-stri...

Reduce Inflation?

https://www.reuters.com/markets/argentinas-august-inflation-...

And it seems that poverty didnt go to 50% under milei, but actually went 10% up (saw it in a different comment here).

I'm not for milei (or against him), as I said, I don't really know or understand argentinian politics to make an opinion (although what is being done might be a bit brutal), really just asking a question here. This looks like an economic transformation or economic revolution in progress, and there will be (of course) difficulties before it goes better.

wmf

9 hours ago

It was obvious and predictable that laying off government workers and ending various subsidy/stimulus/welfare programs would leave many people worse off in the short term. There better be a part two of this plan.

cloudwonderer

8 hours ago

How is this poverty related to present government policies? Seems like the opposite is true.

petermcneeley

16 hours ago

The poor complain; they always do, but that's just idle chatter. Our system brings rewards to all, at least to all who matter.

wahern

15 hours ago

The Guardian stole the sensational headline but then buried the context. Here's the full context from the original Reuters article[1]:

> Argentina's poverty rate soared to almost 53% in the first half of the year, official data released on Thursday showed, the first hard evidence of the painful impact of libertarian President Javier Milei's tough austerity measures.

> That marked a steep jump from 41.7% at the end of last year and more than double the 26% just seven years ago, underscoring the severe cost to regular Argentines of repeated economic crises that have hammered the South American nation.

So the new austerity measures nominally increased the poverty rate by 10%, but the previous rate was already far too high and only getting higher. It remains to be seen whether Argentina can be put back on solid fiscal footing where wealth can grow, and grow equitably. But we know two things for sure: Argentina was already a wreck, and stopping runaway inflation is incredibly difficult. Argentina's inflation is/was incomparably worse to anything the US has experienced, now or historically, but if the US manages to have stemmed it's relatively mild inflation without triggering some kind of downturn (we'll know in the next few quarters) most economists will consider that somewhat surprising.

And Argentina's Gini index was already above 0.40, so it was hardly an exemplar of wealth equality. It's index is about the same as Chile, which had (until Milei) a much more conservative government and even slightly higher per capita GDP, not to mention a significantly lower poverty rate.

[1] https://www.reuters.com/world/americas/mileis-austerity-seen...