Around three million “new poor” have been created in Argentina since the turn of the year, according to the estimates of poverty experts.
According to the estimates of specialists, poverty reached around 52 percent in the first half of the year. That implies that some three million people have slipped below the poverty line since the previous figure issued by the INDEC national statistics bureau for the second half of 2023, which was 41.7 percent – the highest official rate since 2004.
The widely respected Observatorio de la Deuda Social poverty watchdog of the Universidad Católica Argentina (Social Debt Observatory of the Catholic University of Argentina, UCA) sees this first half as the result of averaging out two different stages: a first quarter where poverty reached 54.9 percent, before dipping to 49.8 percent and leaving an average of 52 percent.
The ODSA-UCA calculations are based on microdata from INDEC’s EPH (Encuesta Permanente de Hogares) household survey for the first three months of the year.
“There was a first quarter in which the shock of inflation and recession carried more impact and a second when the recession persisted while receding,” explained the body’s director Agustín Salvia. “This along with lower inflation and a certain recovery in the wages of all the formally employed produced a dip in poverty.”
The poverty ‘Nowcast,’ produced by the Universidad Torcuato Di Tella, came up with a similar figure, indicating that poverty reached 51.9 percent while the official in the first half of 2024.
Yet Leo Tornarolli, an economist and University of La Plata researcher, is more pessimistic in his estimations: “My impression is [a rate of] around 55 percent.”
He detailed: “The situation in the second quarter has not improved too much with regard to the first when we know that poverty was 54.5 to 55 percent so that I would see a similar level for the entire half.”
But Tornarolli cautioned: “Any precision is difficult in the absence of the income distribution data, which INDEC normally publishes before its September poverty figure but this year they are going to publish afterwards.”
Employment
Earlier this month, INDEC posted an unemployment figure of 7.6 percent for the second quarter, which was one reason for poverty not rising more over the past six months.
“The increase in poverty in the first half of this year is mainly concentrated in the early months with their inflationary surge triggering a steep fall in the purchasing power of household income,” said Tornarolli.
“While unemployment also increased a bit, it did not have a very significant effect so that, just like last year, increasing poverty is mainly explained by the reduction of real wages,” he added.
If the current levels of inflation, employment and economic activity of the second and third quarters are maintained, poverty is not expected to drop much below 49 percent in the second half of the year, according to the specialists.
Destitution
The deterioration of social indicators, owing to the heavy economic blows of the first six months of the year, is also reflected in another figure – almost two people out of every 10 are now considered destitute – i.e., they cannot cover the food shopping-basket.
“Destitution is climbing strongly, rising to 20 percent in the first quarter and then going down to 16 percent in the second in the context of improved social plans and the decelerating prices of the basic food shopping-basket. The first half of the year would thus be leaving an average of 18 percent,” remarked Salvia.
The latest official figure for destitution, or extreme poverty, had been 11.9 percent (3.5 million people) for the second half of 2023.
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