Argentina: Poverty would have fallen 16 points in the last half of 2024

The Government’s inflation control Javier Milei It is translating into a very strong fall in poverty in Argentina. A study on real-time poverty forecasting, carried out by the Torcuato Di Tella University, shows that the incidence of poverty in the country would have fallen by 16 percentage points during the second half of 2024.

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According to the National Institute of Statistics and Censuses of Argentina (Indec), in the first half of 2024, the incidence of poverty affected more than half of the population with a rate of 52.9%.

However, the work led by Martin Gonzalez-Rozada, director of the Master’s Degree in Econometrics of the Department of Economics of the aforementioned study house, concluded that in the second half of 2024 poverty would have fallen to 36.8%. In quarterly terms, the proportion of households whose income was not enough to cover the basic basket was 38.8% in the third quarter and 34.8% in the fourth quarter.

“This projection suggests that around 37% of people live in poor urban households. The Permanent Household Survey is a representative survey of an urban population that in the reference semester was estimated at 29.6 million people, which implies that around 11 million live in poor urban households,” the study indicated.

Factors

According to the research, the main cause of the decrease in poverty was the lower rate of growth of prices compared to the income of Argentines.

The report details that in the January-June 2024 semester there was a gap between the increase in the cost of the basic and total food baskets (which includes food and non-food services) and the growth of household income. The growth of baskets was greater than that of income, which raised the incidence of poverty to 52.9% and indigence (extreme poverty) to 18.2%.

However, in the February-July 2024 semester, said gap began to close due to a slowdown in the increase in basket prices. Starting from the March-August 2024 semester, the variation in both baskets and income stabilized and, subsequently, income began to grow above the cost of the baskets. This dynamic allowed poverty and indigence to fall to 36.8% and 9.2%, respectively, in the July-December 2024 semester.

“The variation of the basic food basket for the last projected semester with respect to the June-November semester was 2.1%, while the projected variation of the sum of total family income from low strata was 7%,” detailed the report.

He added that, for the same period, the cost of the total basic basket increased 2.6%; Meanwhile, the sum of total family income grew 5.9%.