Report: Argentina's Middle Class Shrinks

Facts

• The Pontifical Catholic University of Argentina's Social Debt Observatory has claimed that the middle class has declined in the country, as the poverty rate increased to nearly 60%, from 49%, allegedly during the period since Pres. Javier Milei took office.¹
• The latest data from the National Institute of Statistics and Census put the poverty level at 40.1% in the first six months of 2023. In the third quarter of last year, the Social Observatory survey recorded the rate at 44.7%.²
• Additionally, a report from a consultancy firm, which compared the basic remunerations in dollars in South America, has found that the minimum wage in Argentina — $196 at the current exchange rate — is the lowest in two decades and worst among all countries in the region.³
• This comes as the self-proclaimed anarcho-capitalist Milei completed 100 days in office this week. Last month, monthly inflation fell to 13%, and the government achieved monthly surpluses for the first time in over a decade.⁴
• On Monday, thousands of Argentines attended anti-austerity demonstrations called by trade unions and other social movements. Police deployed water cannons, batons, and tear gas to disperse the crowd blocking key roads into Buenos Aires.⁵

Sources: ¹France 24, ²MercoPress, ³Buenos Aires Times, ⁴Economist and ⁵DW.

Narratives

• Pro-establishment narrative, as provided by Foreign Policy. As the far-right Milei has devalued the peso and cut subsidies for essential services, the average Argentine citizen is paying the price for his fiscal adjustment program. Poverty has reached an all-time high in the country, the purchasing power of wage workers has fallen by roughly 14%, and there's a recession on the horizon.
• Establishment-critical narrative, as provided by The New York Sun. Inflation has fallen in Argentina month after month since the libertarian economist-turned-president took office and implemented his shock therapy to revive his country's economy, which has long suffered from hyperinflation and rising poverty. Milei's government has posted the first monthly budget surpluses in years and is making remarkable inroads toward fixing the Argentinian economy.

Predictions