President Javier Milei has dismissed talk of a recession in Argentina and conveyed his confidence regarding his re-election bid, even as the country faces economic challenges. This comes despite a recent contraction in Gross Domestic Product (GDP) by 0.6% in the second quarter, marking the first decline in two years. Analysts from Bloomberg Economics, like Jimena Zuniga, note that these GDP figures are not strong enough to alleviate political concerns weighing on Argentina's markets.
Poverty rates are also a growing concern, with estimates from the Catholic University of Argentina (UCA) suggesting the rate could reach 35% by year-end 2026, a significant increase from 28% in 2025. Agustín Salvia, director of the Argentine Social Debt Observatory at UCA, estimates the current poverty rate to be between 31% and 32%, with approximately 400,000 to 450,000 people falling into poverty each quarter. The unemployment rate also rose to 7.9% in the second quarter of 2026, up from 7.6% in the same period of 2025, with private-sector employment declining for 13 consecutive months.
Milei's approval ratings have seen a decline, particularly among lower-income voters. A September AtlasIntel survey indicates his national disapproval rating is 58%, with approval at 38.1%. Among lower-income respondents (earning up to $650 per month), disapproval surged to nearly 70%, while approval fell below 30%. This suggests a weakening of the voter base that was crucial to his initial election victory, as concerns about the job market are high, with 70% describing it as bad. The government, however, maintains it will not deviate from its austerity program, even if it impacts election chances, to stabilize the economy.
