Argentina's deteriorating economy has combined with shock-therapy austerity measures to plunge millions into dire financial conditions and send the country's poverty rate to a 20-year high.

Amid increasingly difficult conditions and soaring inflation, the poverty rate hit 57.4 percent in January, according to a recent study by the Catholic University of Argentina.

President Javier Milei took office in December, promising aggressive reforms to reduce Argentina's inflation rate, which topped 211 percent last year, and eliminate the large fiscal deficit. Among his first moves was a 54 percent devaluation of the peso against the US dollar.

The devaluation significantly reduced people's purchasing power as prices of food, goods and services increased dramatically. Milei's stated goal was to eliminate growing deficits and tame inflation while paying off the country's foreign debt. Among other measures, the new leader eliminated price caps on a wide range of goods, which sent prices soaring.

"The president may have had the best of intentions, but he failed to consider the impact on ordinary people," said Hernan Alfredo Alancay Diaz, who works as a plumber and Uber driver in Argentina.

"Just imagine, fuel prices went from 300 pesos to over 1,100 pesos in just 15 days. That's the price today."

Milei has implemented a whole host of austerity measures that he deems necessary, such as slashing energy and transport subsidies that previously helped offset living costs. He also cut public sector jobs and hiked taxes.

Economic activity shrank 3.1 percent in December from the month before, the steepest contraction since the peak of the pandemic in 2020, according to government data. December also saw a 4.5 percent year-on-year drop in economic output. The downturn was led by weakness in key sectors like financial services, manufacturing and retail, as the economic reforms dampened consumer spending.

Milei, who was elected by promising to bring triple-digit inflation under control and end what he called "the caste" of Argentina's political dynasties, has defended the painful transition as necessary to achieve long-term macroeconomic stability and break from past mismanagement.

Cristina Salas, who lives in Buenos Aires, said: "At some point, this level of inflation was inevitable, as they had always just been covering it up before", rather than addressing the core issues.

Labor unions have protested the impact of the new policies. In February, healthcare workers staged a one-day nationwide strike against low wages and declining living standards.

The International Monetary Fund forecasts Argentina's GDP will contract by 2.75 percent overall this year.

The writer is a freelance journalist for China Daily.