More than half of Argentina’s population was below the poverty line – 52.2 per cent in the first half of the year alone, the country’s national statistics institute said on Thursday.
The institute’s report said:
The percentage of families living below the poverty line has reached 42.5 per cent, we are talking about 52.9 per cent of people. Among them, 18.1 per cent live in poverty.
According to the report, a basic food basket in Argentina now costs about $700 and the average income of poor families barely reaches the $400 mark. For poor families, the figure is around $230, and a basic food basket for this category costs $350. Compared to the second half of 2023, the poverty rate increased by 11.2 percentage points and poverty by 6.2 percentage points.
Analysts attribute the surge in poverty to the inflation shock at the beginning of the year, lack of recovery in purchasing power, cancellation of social programmes and job cuts. They also cite an aggressive policy of spending cuts to fight inflation as one of the reasons for the increase. President Javier Milei is applying so-called “shock therapy” to restore the country’s economy.
By June 2024, inflation had risen 79.8 per cent, with most of the increase coming in the first few months of the year. However, some analysts believe the worst is over.
Leopoldo Tornarolli, an economist at CEDLAS, noted that the first and second quarters of 2024 saw an improvement, with the poverty rate falling by 4 points. Lorenzo Sigaut Gravina, director of macroeconomic analysis at Equilibra, also said that the poverty rate decreased in the second quarter compared to the first quarter.
Economy Minister Luis Caputo defended the government’s economic plan, saying it had prevented the poverty rate from reaching even higher levels. He said:
This is proof that it’s not an exaggeration when President Javier Milei says that if we hadn’t avoided the catastrophe that many predicted, poverty would have reached levels of 80 or 90%.
