In Argentina, poverty rate highest in ten years

Buenos Aires, Argentina, Dec 9, 2019 / 07:00 pm (CNA).- The latest report issued by the Argentina Observatory of Social Debt of the Pontifical Catholic University of Argentina showed that the rate of poverty and indigence is the highest in ten years.

The report indicated that 6.5% of households and 8.9% of people are indigent, and during the last trimester of 2019, 32.1% of households and 40.8% of people are below the poverty line.

These results show the sudden reversal of the economic conditions recouped by households during 2017.

The Observatory pointed to “cumulative regressive effects” in the country creating “the pitfalls of a growth model that is unstable, unbalanced and unequal, due to the absence of sustainable economic, social and environmental development policies.”

“Both persistent inequality and structural poverty are the result of an economic-productivity imbalance with the effects of exclusion, marginalization, and inequality on the socio-cultural, socio-demographic, and socio-occupational level,” the Observatory stated.

The report measures poverty and indigency rates by income and incorporates a multidimensional measurement that includes access to rights such as food, healthcare and education, basic services, a healthy environment, employment and social security, as well as subjective well-being.

The Observatory determined that although there were “improvements during the decade, structural inequality has increased, expressing itself in food insecurity, poor environmental quality and deficient access to water, energy, sanitation services and decent housing.”

“Repeated devaluations, rising inflation, stagnation, rising unemployment and changes agreed to with the International Monetary Fund explain the deterioration,” they said.

In addition “household labor and non-labor income in the lower middle sectors of society were below the increases in the price of goods and services of basic consumption ”.

Triggering this decline is a greater deterioration of the labor market due to job losses as well as “the impossibility of compensating that deterioration with alternative work. This explains the increase in the rate of indigency as well as the increase in the poverty gap.”

“All this had regressive effects in terms of economic inequality,” the report summarized.

According to a Congressional Research Service October 10, 2019 analysis, the Argentine peso “has lost two-thirds of its value since 2018; inflation is hovering around 30%; and since 2015 the economy has contracted by about 4% and its external debt has increased by 60%. In June 2018, the Argentine government turned to the International Monetary Fund (IMF) for support and currently has a $57 billion IMF program, the largest program (in dollar terms) in IMF history.”

“Despite these resources, the government in late August and early September 2019 postponed payments on some of its debts and imposed currency controls…Argentina has a long history of economic crises. It has defaulted on its external debt (debt held by foreigners) nine times since independence in 1816. Argentina has also entered into 21 IMF programs since joining the international organization in 1956. The current economic crisis facing Argentina stems from longstanding challenges, as well as more recent developments.”

A version of this story was first published by ACI Prensa, CNA’s Spanish-language news partner. It has been translated and adapted by CNA.