Argentina’s Poverty Falls to 7-Year Low as Inflation Eases and Wages Outpace Costs

Argentina’s urban poverty rate dropped to 31.6% in the first half of 2025, its lowest level since 2018, according to estimates by Universidad Torcuato Di Tella using official data from INDEC.

Extreme poverty fell to 7.4%, down from 18.2% a year ago. This marks a significant turnaround after poverty surged to 52.9% in early 2024—one of the highest points in decades—following a major currency devaluation and inflation spike.

The decline reflects a rare moment of income recovery and price stability. Monthly inflation fell below 2% for two consecutive months, reaching 1.6% in June 2025. Inflation had peaked at over 200% annually at the end of 2023.

Meanwhile, real wages in the private sector grew 10.4% between December 2023 and May 2025, allowing incomes to finally outpace the rising cost of living.

For lower-income groups, the shift was even sharper. Their incomes rose 8.5% in early 2025, while the cost of the basic food basket increased by just 2% over six months.

This made essentials more affordable for millions who had fallen below the poverty line during the 2023 crisis. Despite the gains, around 9.4 million people in Argentina’s cities still live in poverty.

Argentina’s Fragile Labor Recovery

Unemployment edged up to 7.9%, and 42% of workers remain in informal jobs without protections or benefits. Employment data also showed a net loss of 79,000 registered private jobs between March 2024 and March 2025.

This reflects ongoing fragility in the labor market. The government’s strict spending cuts, subsidy rollbacks, and monetary tightening—widely criticized for their short-term impact—nonetheless helped stabilize the peso and slow inflation.

Though painful, these policies created conditions for real incomes to recover, especially at the lower end of the wage scale. The speed of the poverty drop—over 21 percentage points in just one year—offers a rare signal of social improvement.

This comes in a country long plagued by inflation and financial volatility. But sustaining these gains will depend on whether job creation and wage growth continue without triggering a new round of instability.

For investors and regional partners, Argentina’s current data offers cautious optimism. After years of crisis, the country is showing that macroeconomic stabilization can bring fast social results—if the recovery holds.

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