Argentina in recovery: the reduction of poverty and the impact of the liberal adjustment

Argentina is in recovery. The reduction of poverty and the impact of the liberal adjustment have marked a  significant change in the country's economy under the administration of Javier Milei. The latest estimate indicates a substantial drop in the poverty rate, suggesting that the implemented reforms have begun to impact the most vulnerable sectors.

This phenomenon occurs in a context of macroeconomic stabilization, reduction of inflation, and transparency of economic variables that were previously distorted by price controls and market restrictions.

The decrease in poverty: a result of the liberal adjustment

The decrease in poverty is a direct result of the liberal adjustment. The data reflect that poverty reached an alarming 52.9% in the first half of 2024, a figure that is the direct responsibility of the previous government and its economic policy, characterized by inflationary mismanagement and market restrictions.

However, in the second half of 2024, the poverty rate dropped drastically to 38.1%, evidencing the positive impact of the stabilization program promoted by the current administration. This reduction represents about 8 million people who have emerged from poverty in recent months, an unprecedented improvement in such a short period.

The government has prioritized correcting structural imbalances through an unprecedented fiscal adjustment, eliminating subsidies and reducing public spending. These measures have been accompanied by market liberalization that has allowed a gradual recovery of competitiveness and has begun to reflect in the improvement of social indicators.

Inflation, which has historically been the main factor in the deterioration of the purchasing power of the most vulnerable population, has shown signs of deceleration, allowing a real recomposition of income.

The perception of the adjustment and its effects on the economy

The perception of the adjustment has caused diverse reactions, but its effects on the economy are undeniable. While some critical sectors have questioned the validity of the data or attempted to minimize its impact, the analysis from various sources, such as the Torcuato Di Tella University, suggests that the number of people in poverty has decreased significantly in recent months.

The year-on-year comparison and the observation of the evolution quarter by quarter reinforce this positive trend. The methodology used in these studies is consistent with that employed in previous periods, which rules out biased interpretations regarding the measurement of these indicators.

President Milei has replied to these reactions by highlighting the importance of the dynamic of change and the need to recognize the effects of adjustment policies in a context where the Argentine economy was heavily conditioned by previous distortions. In this sense, he has pointed out that the drop in poverty indices highlights the effectiveness of his economic program, based on liberal principles that seek to strengthen sustainable growth and market autonomy.

The impact of these reforms is reflected not only in the improvement of social indicators,
but also in the international perception of the Argentine economy. The stabilization of key variables has caused a more favorable environment for investment and has strengthened confidence in the adopted course.

Although structural challenges persist, recent data suggest that Argentina is undergoing a recovery process that, if sustained, could consolidate a sustained reduction in poverty and an improvement in the quality of life of its population.

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By Diego Macana Roa