Argentina's poverty rate fell to 38.9% in the fourth quarter of 2025—the lowest level since 2018—providing the first hard evidence that President Javier Milei's radical economic reforms are delivering results beyond Wall Street applause.
The data, released by Argentina's national statistics agency, shows poverty declining from 52.9% when Milei took office in late 2023. That's 14 percentage points in roughly two years—a stunning reversal for a country where poverty had been rising steadily for a decade.
But before anyone declares victory, let's look at what it took to get here—and what it cost.
Milei's program has been called shock therapy, and the name fits. He slashed government spending by 30%, eliminated energy and transport subsidies, fired 70,000 public employees, and let the peso float freely—triggering 254% inflation in his first year. The medicine was brutal. The question was whether the patient would survive.
Apparently, it did. Inflation has since fallen to 4.2% monthly (still high, but down from double digits). The fiscal deficit has been eliminated, turning a 5% of GDP shortfall into a small surplus. Foreign reserves are rebuilding. Credit markets have reopened. And now, poverty is falling.
The numbers suggest something economics textbooks predict but real-world politics rarely allow: if you stop printing money to fund deficits, inflation falls, currency stabilizes, and real wages recover. Argentina is becoming a live-fire test of this thesis.
But cui bono? The poverty decline is real, but uneven. Informal workers and urban poor have seen the fastest improvement as food prices stabilized and the peso regained purchasing power. But public sector workers who lost jobs, retirees on fixed incomes, and subsidy-dependent industries are worse off. That's why Milei's approval ratings remain polarized despite the macro improvements.
The sustainability question looms large. Can Argentina maintain fiscal discipline once the emergency passes? Will voters reward Milei's party in the next election, or punish it for the pain along the way? Can the economy grow fast enough to absorb displaced workers without reigniting inflation?
For now, the data supports Milei's gamble. Poverty is falling faster than most economists predicted. Whether that continues depends on factors beyond any president's control—global commodity prices, Brazil's economic health, and whether Argentina can finally break its century-long cycle of boom, bust, and default.
It's a fascinating real-world experiment in economic policy. Ask me in five years whether it worked. For now, the numbers are moving in the right direction—and that's more than Argentina could say for most of the past decade.
