Argentina: Extreme Poverty Rises to Highest Level Since 2005

On Wednesday, the National Institute of Statistics and Censuses (INDEC) published a report showing that the urban extreme poverty rate in Argentina reached 11.9 percent in the second half of 2023, marking the highest rate since 2005.

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Compared to the second half of 2023, this rate, which measures the population sector that cannot even cover their basic food needs, increased by 3.8 points.

In the second half of 2023, the poverty rate stood at 41.7 percent, 1.6 points higher than the previous semester and with a rise of 2.5 points compared to the previous year, constituting the highest value since the second half of 2020.

The report took into account the standard of living in the 31 most populated urban centers, where 29.5 million out of 46 million Argentines are concentrated.

Since INDEC measures poverty based on access to the basic basket, social indicators are directly linked to the evolution of household incomes and the cost of food and services.

In 2023, the consumer price index accumulated an increase of 211.4 percent, the world's highest inflation rate. In this context, the value of the basic basket of food and services, which marks the poverty line, increased by 225 percent.

But the increase was much higher for the food basket that defines the extreme poverty line, which climbed 258.2 percent.

Besides experiencing an inflationary process, the Argentine economy contracted by 1.6 percent, which implied little creation of quality jobs and high levels of informal employment and self-employment.

In these last two groups, incomes are lower and clearly lose the race against inflation, pushing thousands of people into poverty, even those with a job.

In 2023, wages increased by 165.8 percent in the registered private sector and 115.3 percent in the informal private sector, with a substantial loss of purchasing power.

In just the second half of 2023, while household incomes rose by 69 percent, the cost of the basket of goods and services jumped by 75.8 percent and that of the food basket climbed 81.6 percent.

Currently, 58 percent of children under 14 are poor and 19 percent of the country's children and adolescents can't even cover their basic food needs.

Young people are the second most vulnerable group: 47 percent of Argentines between 15 and 29 years old are poor and 14 percent are indigent.

As for 2024, the outlook is not positive for social indicators as inflation continues at very high levels, reaching 276.2 percent year-on-year in February.