https://www.lanacion.com.ar/economia/estiman-que-la-pobreza-de-milei-en-su-primer-ano-cerrara-por-debajo-de-la-que-dejaron-alberto-y-nid19122024/

Private analysts believe that the second half of the year could end at around 40%; the Government estimated that in the third quarter it would have been 38.9%; in 2023 it closed at 41.7%

Despite a strong adjustment in public spending – which exceeded 30% – coupled with a normalization of relative prices – release of price controls and rise of the dollar last December – the first year of Javier Milei's government may end with less poverty than that left by Alberto Fernández and Cristina Kirchner thanks to the stabilization of the macroeconomy and the recovery of activity, employment and wages, all still in small monthly doses.

Poverty experts told LA NACION that the second half of the year could reach 40% poverty. The fourth Kirchner government left that figure at 41.4%. With employment data and the evolution of income distribution – a number that Indec released today – the Government calculated that poverty in the third quarter of the year was 38.9%. Indec only publishes half-yearly data, and the number for the end of 2024 will be released on March 31, 2025.

The year 2023 had closed with 19.5 million poor people across the country. Extreme poverty had soared to 5.4 million. In the fourth quarter of that year, according to private estimates, poverty could have reached almost 45%.

“Poverty continues to decrease in Argentina. The data comes from a work by the Ministry of Human Capital, through the National Council for the Coordination of Social Policies (CNCPS), which based on data from Indec, projects that in the third quarter of 2024 poverty was in the order of 38.9%,” said a statement from the Government.

Human Capital explained that the projection was made using the publication of the Indec Income Distribution Report. “In this way, thanks to the implementation of economic policies that have contributed to reducing inflation and stabilizing the economy, poverty continues to decline in the year, after having gone from 54.8% in the first quarter to 51% in the second, and with a projection of 38.9% for the third,” it added. The CNCPS projects that indigence was located during this period at 8.6%, after having registered 20.2% in the first quarter and 16% in the second.

“This decline is explained by two key factors: the economic policies taken by the Government, which helped to balance the macroeconomy and put a stop to inflation, and the targeting of direct and transparent transfers to the most vulnerable sectors,” said the ministry headed by Sandra Pettovello.

Private analysts agree

Three specialists in poverty issues consulted by LA NACION agreed that at the end of the year poverty could be around 40% and also ratified the data projected by the Government for the third quarter.

“The data on the distribution of total household income for the third quarter suggest that the poverty rate for that quarter would be around 39%,” concluded the specialist from the Torcuato Di Tella University (UTDT), Martín Rozada.

“This value together with a poverty rate of 51% in the second quarter indicate a poverty rate for the April-September semester of 44.9%. If the evolution of household income is similar to that of the third quarter and the inflation of basic baskets continues to slow down, the poverty rate for the second half of the year would be around 40% and the indigence rate around 11%,” Rozada added when asked by this media.

“Unlike what happened last year when the evolution of the incidence of poverty was 41.7%, but growing between the third and fourth quarters, this year the information so far suggests the opposite, the half-yearly average would be with a poverty rate falling between the third and fourth quarters of 2024,” he concluded.

“According to estimates generated from recent publications by the EPH-INDEC, referring to the third quarter of 2024, the population living in poverty is at values ​​similar to the third quarter of 2023 (38.6% in 2023 and 38.9% in 2024),” said Agustín Salvia, coordinator of the UCA Social Debt Observatory.

“In the period between the second and third quarters of this year, this percentage fell sharply from 51% to 38.9% of the population. This drastic decrease is due to the effect of the slowdown in price increases and the relative increase in the purchasing power of the labor income of the middle classes,” added the sociologist.

Salvia said that the poverty rate rose from 10% to 8.5% when comparing the third quarters of 2023 and 2024. “This shows a situation of rapid recovery, considering that in the second quarter of this year 16% of the population was in this situation. This is basically due to the increase in non-labor income of the lowest-income households and the marked slowdown in the increase in prices, mainly in relation to food and beverages,” he said. For the UCA specialist, the second half of this year may even end slightly below 40%.

Leopoldo Tornarolli, a specialist at Cedlas of the University of La Plata, agreed with this possibility. “This is going to sound strong, and I am double-checking because it is surprising: poverty in the April-September semester would have been below 45%, a drop of eight points compared to January-June. And in July-September it was something like 38.5%. If so, it could close 2024 below 2023,” the researcher in poverty, inequality and socioeconomic aspects explained in X.