Argentina's official poverty rate fell to 38.1% in President Javier Milei's inaugural year, as reported on Monday by the National Statistics Institute (INDEC). This reduction in poverty during the latter half of 2024 represents a shift from the 41.7% rate noted at the close of 2023, right before Milei took office. Addressing the economic collapse primarily caused by years of reckless borrowing by previous administrations was at the core of his campaign.

"These numbers highlight the shortcomings of earlier policies, which left millions of Argentinians in precarious circumstances," stated Milei's office following the report's release. "By promoting economic freedom and fiscal responsibility, we aim to achieve lasting poverty alleviation."

Nevertheless, numerous economists caution that the official data may not truly reflect the circumstances faced by Argentinians enduring what has been described as the most extreme austerity measures in the nation's history. Milei's significant cuts have affected everything from public kitchens and transportation fares to housing expenses and healthcare, severely diminishing people's purchasing power.

"There’s a significant disparity between what the statistics indicate and the actual experiences on the streets," remarked Tomás Raffo, an economist at CTA, Argentina’s foremost public sector workers’ union. "We have been hit very hard. More people have slipped into poverty, and while some are now escaping it, those who were poor before find themselves even poorer."

In the first half of 2024, during Milei's first six months, INDEC reported that the poverty rate had climbed to 53%. The newly released data now shows a drop of 14.8% since then, alongside a marked reduction in inflation. February figures indicated Argentina’s annual inflation had decreased to 66.9%, down from 276.2% in the same timeframe the previous year.

"This is a politically significant victory for the government, especially ahead of a midterm election year," asserted Camilo Tiscornia, director of C&T Asesores Económicos, a Buenos Aires-based consulting firm. He observed that this is the lowest poverty rate seen since the first half of 2022. "It suggests that the government’s efforts are beginning to yield results."

However, on the streets of Buenos Aires, the economic “improvement” is not easily noticeable. Increasing numbers of Argentinians are scavenging for food in dumpsters or selling items at traffic lights just to survive. "I see many more people selling their possessions and sleeping on the streets," shared Lorena Jiménez, 46, who sells stickers with two of her nine children. A former housekeeper who lost her job last year, Jiménez now often sleeps on the streets with her children. Occasionally, they use the government's monthly stipend of $160 to afford a night in a budget hotel.

"For me, the claims about lower inflation and poverty are a lie," stated Viviana Suárez, a 48-year-old insurance agent from Buenos Aires. "How does that make sense? I go to the supermarket and see the prices. You can’t buy anything unless it's on sale."

An increasing number of economists are also starting to challenge the credibility of INDEC’s inflation data. They argue that the Consumer Price Index (CPI) is constructed from a basket of basic goods from 2004, which skews the findings. "It’s incredibly outdated and fails to give sufficient weight to the items whose prices have surged most recently," Raffo noted.

For instance, CTA economists emphasize that food today constitutes a smaller fraction of the average household budget compared to two decades ago. The index does not incorporate modern expenses like digital subscriptions or updated living costs. According to Raffo, it also neglects the rise in essential private service costs such as healthcare and education since Milei took office, along with increased rent prices in a newly deregulated housing market. "INDEC captures very little of what’s actually happening."