BUENOS AIRES: Argentina’s poverty rate remains above its pre-pandemic level in the first half of this year as high inflation eroded the benefits of the country’s economic recovery.
About 36.5% of Argentines lived in poverty earlier this year, the government’s statistics agency reported last week. That’s above the 35.5% reading just prior to the pandemic and well above the previous low of 25.7% seen in 2017.
While poverty has come down since 2020, its progress lags behind the economy’s overall recovery, including an unemployment rate at its lowest level since at least 2016.
More Argentines have formal, payroll jobs than ever before, too.
The outlook ahead for poverty in Argentina looks worse.
The defining line for poverty is the number of people who can afford a basic basket of essential goods, a unit that the government publishes every month.
High inflation heading toward 100% in the coming months is eroding wages, diluting the job gains, which are mostly concentrated in low-paying sectors like tourism and retail.
In August, consumer prices rose 78.5% from a year ago, almost certainly a faster pace than many salaries.
In the most recent month of data, wages in June for Argentina’s informal workers, who are largely low-income, were only up 58%.
The poverty figures dialled up political tensions.
Powerful vice-president Cristina Fernández de Kirchner called on Economy Minister Sergio Massa to implement stricter price controls on food, noting that extreme poverty slightly increased in the first half of the year.
“The Economy Ministry has worked very hard in all of its areas, but a more precise intervention policy is necessary for the sector,” Kirchner tweeted last week.
“The ministry should “design an instrument that reinforces food security for those in extreme poverty.” — Bloomberg