Argentina | Economic Crisis – Final Report (MDRAR022)

Please refer to the attached file. A. SITUATION ANALYSIS Description of the crisis Since 2018, Argentina has been facing a severe economic and social crisis marked by a progressive deterioration in living conditions and a significant increase in humanitarian needs. The crisis has been characterized by a sharp currency devaluation, sustained increases in the prices of essential goods and services, and a substantial loss of household purchasing power. These conditions worsened significantly at the beginning of 2024, when year-on-year inflation exceeded 250 per cent and the costs of food, medicines, transport and basic services rose sharply. As a result, humanitarian needs increased considerably, with many households facing growing difficulties in accessing adequate food, healthcare, hygiene items and other basic necessities. These dynamics disproportionately affected people in situations of greater vulnerability, particularly older people, informal workers, families with children and people experiencing homelessness. Although some macroeconomic indicators began to improve from mid-2024 onwards, the recovery remained uneven throughout 2025. In the second quarter of 2025, Gross Domestic Product (GDP) recorded year-on-year growth of 6. 3 per cent, while accumulated inflation during the first nine months of the year reached 22 per cent and year-on-year inflation stood at around 31. 8 per cent. Despite these positive trends, improvements at the macroeconomic level did not translate into sustained improvements in living conditions. Household consumption remained unstable, and the labour market continued to show signs of fragility, with unemployment close to 7. 6 per cent and persistently high levels of informal employment. The deterioration in purchasing power remained one of the defining characteristics of the crisis. By August 2025, the minimum wage (Salario Mínimo, Vital y Móvil) had reached 322, 000 Argentine pesos (ARS), while the cost of the total basic basket (Canasta Básica Total) for a household of four exceeded ARS 1, 176, 000 the following month. Although the minimum wage had increased in nominal terms since the end of 2023, these adjustments failed to keep pace with inflation, resulting in a significant decline in purchasing power. The widening gap between household income and the cost of living continued to limit many families’ ability to meet their basic needs and reflected the persistent financial strain experienced by households. Social indicators also reflected the persistence of structural vulnerabilities. Although official statistics reported a reduction in monetary poverty to 31. 6 per cent during the first half of 2025, several analyses highlighted the need to interpret these results with caution due to methodological limitations and the challenges of fully capturing changes in real income and the cost of living. At the same time, household economic fragility remained evident, with high levels of family indebtedness and a growing proportion of household income allocated to debt repayment. According to official data published by the National Institute of Statistics and Censuses (INDEC), complemented by analyses from the Argentine Red Cross Humanitarian Observatory and specialized secondary sources, the improvements observed in selected macroeconomic indicators had not yet translated into broad-based improvements in household wellbeing. Persistent income disparities, widespread labour informality and continued barriers to accessing essential goods and services continued to disproportionately affect the most vulnerable population groups, reinforcing the need for sustained humanitarian assistance and protection.

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