Tuesday, April 16, 2024

ECONOMY | 19-02-2024 13:45

Inflation leaving more than a million Argentines poor per month

Over the past three months, over 3.6 million people have slipped into poverty, new data shows.

By one million per month, Argentines fall into poverty as a result of the runaway inflation and the devaluation of the peso. 

At this rate, by late February there will be over 23 million in poverty conditions, that is, with serious difficulties to cover their expenses this month. It is a dramatic setting.

Over the last three month, 3.6 million more Argentines fell into poverty and, as of January, poor people account for 46.8 percent, some 22 million people, according to a study by Universidad Di Tella.

In a matter of three months, due to the devaluation and hike of the basic food basket, 3.6 million new poor people were added to the figure, from the professional and wage-earning middle class. Having a job and being a professional no longer prevents people from falling into poverty in Argentina.

Poverty climbed from 38.5 percent in the third quarter of last year, to 46.3 percent in the last quarter of 2023. It is an increase by 7.8 points, huge from a statistic standpoint.

The calculation is by Martín Rozada, director of the Master’s Degree in Econometrics at Universidad Di Tella, who added that for January the projection would be 46.8 percent of poor people. This equals 21.8 million people if that rate is projected to the entire country, including the rural population.

Inflation in January was 20.6 percent, but in the poorer regions or provinces the average rise of prices was higher. 

For instance, in Tucumán inflation was 24.1 percent according to the Statistics Bureau in that province. In December, it had been 24.5 percent.

With these values, poverty in the second half of 2023, which was 42.7 percent, might be higher than the 40.2 percent recorded in the second half of 2023 and the 39.2 percent in the second half of 2022.

The data from the INDEC Statistics Bureau show that the poverty basket rose by 72.9 percent in the fourth quarter of 2023, with a peak of 27 percent in December, after the devaluation of the peso. 

During the entirety of 2023, the increase of the poverty line was 225.1 percent versus an average inflation of 211.4 percent.

In January, the poverty basket for an adult was 193,146 pesos and 596,823 for a standard family, without taking into account rent.

In the meantime, in the fourth quarter of 2023, formal and informal wages increased on average by 28,7 percent and 152.7 percent during the whole of last year, in both cases well below average inflation and the increase of the poverty line.

In 2023, with the inflationary leap in December, retirees and pensioners lost between 14,2% -in the case of those who collected the minimum pension bonus- and 32.3 percent for medium and higher pensions. In addition, in January and February 2024 they collected the same as in December, with inflation in those two months being 45 percent.

It is estimated that child poverty (under 14 years old) which in the third quarter was 54.8 percent, might have been higher than 60 percent in the last three months of last year.

The INDEC Statistics Bureau does not disseminate the quarterly destitution and poverty figures due to the alteration caused in the measurement by the half bonus, in June and December. That is why it discloses those figures every six months, taking into account the periods January-June and July-December.

The impact of poverty and destitution in the second half of 2023 will be disclosed on March 27.

Nevertheless, by disseminating the microdata of the Permanent Household and Income Distribution Survey it is possible to calculate a set of social indicators by cautiously comparing homogenous quarters.

That being said, the specialists who handle those INDEC Statistics Bureau may calculate those key indicators.

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