Poverty levels in Argentina hit a shocking 57.4% in January, the highest in at least 20 years. The figure is a new report from the Argentine Catholic University’s respected Social Debt Observatory. It underscores the South American nation’s growing economic challenges, exacerbated by currency devaluation and subsequent price hikes. The report is based on household surveys from the third quarter of 2023 to early this year and considers basket costs, labor income, and other non-labor income.
According to the report, poverty rose from 44.7% to 49.5% between the third quarter of last year and the first three months of this year as the inflationary effects of the peso’s devaluation took hold. The report adds that the rise in poverty is also a result of the higher cost of housing and other items.
The poverty increase comes as demand has jumped at the nation’s 41,000 soup kitchens, which serve those struggling to get by as real wages continue to fall. In the first half of this year, demand for food at these centers grew by 30%. That increase partially reflects the fact that far-right President Javier Milei has effectively ended federal assistance to the kitchens, which now must rely solely on provincial and private contributions.
Milei, a leading candidate in next month’s presidential election, has vowed to rein in Argentina’s runaway inflation and cut government spending to bolster the economy. However, experts warn that it will be tough to lower poverty levels as long as the economy stagnates and inflation runs wild, eroding household purchasing power.
The official figures published by the INDEC national statistics bureau show that 39 percent of Argentina’s urban population was living below the poverty line in the first half of this year, up from the previous figure of about 37 percent. But the rise in poverty is expected to accelerate as the year wears on, with inflation soaring above 124% and undermining households’ purchasing power.
According to the report, the rise in urban poverty is mainly due to higher prices of essential goods, including cereals and meat. It is based on household surveys of 5,760 households in a set of large urban conglomerates, including the capital, Buenos Aires and Greater Cordoba, Rosario, Mendoza, and San Juan. In addition to the rising number of needy people, the report points out that almost one in five Argentines is now considered “structurally poor,” which means that they have been living below the poverty line for generations and cannot break the cycle.
As such, they will likely not be affected by the recent upturn in the economy,, and inflation will likely continue to rise. The number of those in this category is estimated at around 25 million people. The figure includes those whose income does not even cover the cost of food and those who live in extreme poverty, defined as a daily consumption of less than $2 per person.
