Poverty And Inflation In Argentina: These Are The Figures

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, supporting forecasts of greater impoverishment in this second half of the year.

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 stood at 9.3% in the first half of the year, 1.2 points above the rate registered in the second half of 2022 and 0.5 points more in the year-on-year comparison.

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 about 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 data known this Wednesday is this: almost 6 out of every 10 children up to 14 years old are poor and 13.6% cannot even satisfy their basic food needs.

Punished pockets

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 food basket and services, whose value marks the poverty line.

In fact, the increase in the cost of basic baskets 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 semester and the increase in the price of the food basket -which marks the poverty line- was 55.1%.

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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-employed employment component.

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.

To worst

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.

The 22% devaluation in the official exchange rate one day after the presidential primaries on August 13 translated into a sudden inflationary jump of 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.

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 contraction, private consultants project poverty rates close to 42% by the end of this year.