Milei acknowledges poverty rise, defends austerity: 'The photo is horrible, but the trend is wonderful'

Argentine President Javier Milei has acknowledged an increase in poverty during the first quarter of the year, attributing it to a rebound in inflation and stagnant incomes. Despite this, Milei defended his government's austerity policies, asserting that the current economic situation, while dire, is improving.

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The photo is horrible, but the trend is still wonderful.

"The photo is horrible, but the trend is still wonderful," Milei stated, emphasizing his belief in a positive economic trajectory. He pointed to falling inflation and a general decrease in poverty levels, contrasting the current situation with a previous high. Private analysts, however, using data from the Permanent Household Survey, estimated that poverty reached 30.7% in the first three months of the year, an increase from 29.9% at the end of 2025 and 26.9% in the third quarter. This suggests an increase of approximately 600,000 people living in poverty.

Milei also defended the deliberate reduction in public sector wages as a key component of his economic strategy, referring to it as the "chainsaw" effect. He argued that this adjustment is borne by the state, aiming to streamline public employment. Conversely, he suggested that private sector wages have slightly outpaced inflation, while informal sector wages have surged significantly.

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The salary of the public sector falls, but that is a desired result of the model. It implies that the adjustment is paid by the State. It is the chainsaw.

The president further criticized focusing on microeconomic data, arguing that macroeconomic indicators provide a more accurate picture of the overall economy. He asserted that Argentina's GDP, consumption, and exports are at historic highs, dismissing concerns about specific sectors as a misinterpretation of the broader economic trend. Milei also reacted to statements from La Rioja Governor Ricardo Quintela regarding potential future presidential election outcomes.

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If I look at GDP, it is at a historic maximum. If I look at consumption, it is at a historic maximum, exports too. Many are telling a story of a fallacy called the part for the whole, they look at a small piece and generalize it.