Crisis worsens in Argentina: poverty reaches 40.1 percent of citizens

The urban poverty rate in Argentina climbed to 40.1% in the first half of the year, its highest level in three years. in a scenario of growing inflation that pulverizes income and has worsened in recent months.

According to a report released this Wednesday by the National Institute of Statistics and Censuses (Indec), The poverty rate in the first half of the year was 0.9 percentage points above the index registered in the second half of 2022 and 3.6 points above the rate of the first half of last year.

Meanwhile, The indigence index – which indicates people who cannot cover basic food expenses – stood at 9.3% in the first half of the year, 1.2 points above the registered rate in the second half of 2022 and 0.5 points more in the interannual comparison.

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People living on the street in Buenos Aires (Argentina).

The measurement takes into account the standard of living in the 31 most populated urban centers in the country, which covers 29.2 million people, but, if the indices were projected to the total Argentine population, Of some 46 million inhabitants, it is estimated that there are 18.4 million poor and almost 4.3 million indigent.

These numbers reveal a shocking reality: In just one year, 1.65 million people fell below the poverty line in Argentina and some 230,000 joined the group of indigents.

But the hardest fact known this Wednesday is that almost 6 out of 10 children up to 14 years old are poor and 13.6% cannot even meet their basic food needs.

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The impact of inflation

The increase in poverty in Argentina during the first semester coincided with a strong acceleration of inflation, which in the first half of the year accumulated an increase of 50.7%, with a strong impact on the cost of the basic basket of food and services, whose value marks the poverty line.

In fact, the increase in the cost of the basic basket was higher than that of the general price index: The increase in the value of the food and services basket was 52.4% in the first half and the increase in the price of the food basket – which marks the poverty line – was 55.1%.

At the same time as this inflationary jump, the Argentine economy fell by 1.9% in the first half of the year, while unemployment fell to 6.2% in the second quarter of this year, but without the generation of formal salaried work and with a high informal and self-employment component.

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The strong devaluation of the Argentine peso has been caused by concern over the evolution of the economy and the presidential election on October 27.

In these last two groups, income is lower and they clearly lose the race against inflation, pushing thousands of people into poverty, even those with a job.

According to official data, salaries grew in the first half of the year by 47.3% in the registered private sector and 41% in the informal private sector, with a substantial loss of purchasing power.

The information known this Wednesday is not only bad. It is, furthermore, an ‘old photo’ of a social reality that, in economic dynamics, has gotten much worse as soon as the second semester began.

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The 22% devaluation in the official exchange rate one day after the presidential primaries on August 13 translated into a sudden inflationary jump 12.4% against July and 124.4% in interannual terms.

But the jump in the value of the basic food basket in August was overwhelming – 17% compared to July and 94.4% year-on-year -, suggesting a severe worsening of social indicators for the second half of the year. In September, inflation shows signs of slowing down, but at still very high rates.

Sergio Massa

Sergio Massa, Minister of Economy of Argentina.

The Argentine Minister of Economy, Sergio Massa, candidate for the presidential elections on October 22, has taken several measures in recent weeks that seek to alleviate the sharp loss of household income, but their effects are still unknown.

In this scenario, and with forecasts for the coming months of inflation that will remain very high and an economy in contractionprivate consultants project poverty rates close to 42% by the end of this year.

“There is a situation of loss of purchasing power for all groups of the population,” said Leopoldo Tornarolli, researcher at the Center for Distributive, Labor and Social Studies of the National University of La Plata.

According to this expert, the trend is upward and the very high inflation of the last three months will generate at the end of the year “another maximum of poverty that will even exceed the worst moment of the pandemic”, at the end of 2020, when it reached 42%.

*With AFP and EFE

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