By Nicolás Misculin
BUENOS AIRES, Sept 24 (Reuters) – Crowded community soup kitchens, the resurgence of swap clubs and families turning to short-term loans to buy groceries are underscoring rising social tensions in Argentina, while economists expect official data released on Thursday to show the first rise in poverty since President Javier Milei took control of inflation.
The National Institute of Statistics and Censuses (Indec) of Argentina said that poverty reached 32.3% of the population in the first half of 2026, up from 28.2% recorded in the previous period.
Estimates from the Argentine Catholic University (UCA) are considered an early indicator of official poverty trends. They suggest the rate could rise to 35% of the population by the end of the year, reversing part of a sharp drop that reduced the rate to 28% in 2025 and marking a setback for Milei a little over a year before the next presidential election in Argentina.
“Every quarter, in the last four quarters, between 400 thousand and 450 thousand people fell into poverty,” said Agustín Salvia, director of the Argentine Social Debt Observatory at UCA, who predicted that the poverty rate is currently between 31% and 32%.
If confirmed, the increase would still leave poverty well below the levels observed during Milei’s first year in office.
Analysts say this could indicate that the social gains driven by the deceleration of inflation are losing momentum, with new progress increasingly dependent on stronger job creation and the growth of real wages.
“A modest increase in poverty would not negate the major reduction observed under Milei’s government, but would suggest that the easier part of the improvement has already ended,” said Nicholas Watson, managing director for Latin America at the consultancy Teneo.
ECONOMIC TENSIONS TEST SUPPORT
Milei came to power at the end of 2023 with strong support from low- and middle-income voters, frustrated by years of galloping inflation. While his libertarian government has sharply slowed price rises and stabilized public finances, social and professional assistance organizations say more Argentines are having trouble paying the bills.
In a community hall on the outskirts of Buenos Aires, Ana Barreto helps run a swap club, where residents trade goods instead of using money.
“Poverty has drastically worsened,” Barreto, a teacher who founded the club in August in Villa Astolfi, said, reviving a practice associated with economic crises of the past.
Cooking oil, sugar, flour and pasta are among the most sought items, she said, often traded for used clothing and household utensils.
The growing difficulties appear to be undermining support among low-income voters as Milei advances toward a likely bid for reelection in 2027. The latest polls show Milei’s approval rating has dropped sharply among the poorest respondents, raising doubts about whether he can maintain a base that was crucial to his victory in the previous election.
A AtlasIntel survey conducted in September showed that disapproval among low-income respondents — defined as those earning up to about $650 per month — rose to nearly 70%, while approval fell to less than 30%. Nationally, 58% disapprove of Milei, while 38.1% approve.
LOWER INFLATION IS NO LONGER ENOUGH
Cuts to public sector wages, the elimination of subsidies for transport and public services, and the loosening of import rules have pressured households and burdened some sectors with a focus on the domestic market.
The Milei government says that austerity measures are necessary to restore economic stability, eliminating chronic budget deficits that contributed to repeated crises and high inflation. It argues that balancing the budget and generating a fiscal surplus will strengthen public finances, reassure investors, and create the conditions for sustainable growth.
But Gustavo Raúl Pérez, owner of a hardware store in San Fernando, north of Buenos Aires, said his business has been harmed because customers can no longer afford to buy.
“Four years ago, I had queues of customers. I sold ten wheelbarrows; now I’m selling only one,” Pérez said.
“I voted for Milei believing he would bring changes for the better, but he really disappointed me,” he added.
Unemployment rose to 7.9% in the second quarter of this year, up from 7.6% in the same period of 2025. Private-sector employment has fallen for 13 consecutive months, and the recovery of family income has largely stagnated, said Watson.
The government says it will stay the course.
“The president will not budge an inch from his program. He will not loosen his contractionary monetary policy to win elections,” said a government spokesperson to Reuters.
The Milei administration has refused to increase public spending or renew subsidies — measures often used in election years — arguing that such steps would undermine its efforts to curb inflation and maintain fiscal discipline.
In another swap club created two years ago, Melany Malén Borré said that many feel frustrated because improvements in their living standards have not materialized.
“I think the people who voted for Milei expected progress that never happened,” said Borré.
(Reporting by Nicolás Misculin, additional reporting by Miguel Lo Bianco)
