Poverty could reach a maximum peak in 20 years, what can happen to the apartments?

Poverty could reach a maximum peak in 20 years, what can happen to the apartments?
Poverty could reach a maximum peak in 20 years, what can happen to the apartments?

After learning that the level of inequalitymeasured by the Gini coefficient, They made a strong jump in Argentina and reached their highest levels in 16 years, Analysts estimate that the Poverty was close to 55.5% in the first quarter of 2024, a 20-year high. Historically, with successive economic crisesArgentina reaches new peaks of poverty. Now, faced with a new recessive context, the doubt arises again about what will be the number of new poor that this economic cycle will leave behind.

It happens that, as the crises go by, the floors of this indicator are increasingly higher. The most alarming was that of 2002, at the end of the Convertibility. To analyze this dynamic, it is key to take a look at what the relationship between poverty and crisis was like in the 40 years of democracy:

  • Hyperinflation crisis (1989): poverty reached 46.3%With the arrival of Menemism, inflation found a 23% flat after stabilization by means of Convertibility.
  • Convertibility crisis (2002): after the political-social outbreak of 2001 and with the deepening of the worrying economic situation, Poverty soared to 74.6% and the Homelessness reached 31.4% of the population. With the stabilization of Kirchnerism, the indicator found a floor around 25%. However, during the last stage of the government of Cristina Fernández de Kirchner Poverty grew again, but in 2017, already under the government of Mauricio Macriwas again around the 25.7%.
  • Financial/debt crisis (2018): After the reduction in poverty in 2017, which was achieved thanks to the decrease in inflation, the number of people living in poverty rose again and, in 2019, reached 35.5%.
  • Coronavirus pandemic crisis (2020): far from improving this situation, a product of the impetuous coronavirus pandemicalready in the government of Alberto Fernandezpoverty reached 42% of the population and extreme poverty reached 10.5%, due to the halt in activity. However, with the reactivation, this figure decreased somewhat to 37.3% in 2021, but soon grew again. Fernández left a country with 148.2% inflation, 41.7% poverty and 11.9% indigence.

Poverty in the Milei era

The Poverty in Argentina rose in 2024 and stood at 55.5% in the first quarter of the year, according to data from the Social Debt Observatory of the Argentine Catholic University (UCA). When extrapolated, this implies that it reached about 25 million people, of which he 17.5% (8 million) are below the poverty lineaccording to the economist and director of the Observatory, Augustine Salvia.

He National Institute of Statistics and Census (INDEC) will report poverty data only in Septemberalthough the data is from the first semester, that is, it includes both the first and second quarters.

Poverty is basically the x-ray of a country with completely red economic indicators: increase in unemploymentsince between January and March they lost 150,000 Job positionsas explained by the economist Daniel Schteingart. Furthermore, with extremely low wages, with falls of 14% between December and Apriland one Consumption fell sharply by 7.7% year-on-year in May.

Poverty in children

Added to this is the heartbreaking fact of United Nations Children’s Fund (UNICEF) about what about 10 million girls and boys in Argentina eat less meat and dairy compared to last year due to lack of money. Furthermore, he adds that the income of almost half of the households in which girls and boys live are not enough to cover basic expenses for food, health and education.

In addition, since UNICEF, They warned about cuts in spending aimed at children and adolescents, which show a drop of 25% in real terms. This occurs in a context in which the The Government retained more than 5,000 tons of food in two warehouses of the Ministry of Human Capitalwhich, after a judicial setback that led to the leader’s complaint Juan Graboisreported that it will deliver the products to vulnerable schools with the help of CONINhe Army and the Ministry of Defence. Now, this battle has begun a new chapter with the complaint about the sale of powdered milk on e-commerce platforms of the one intended for that purpose. Likewise, there is still no news about the distribution of these foods by the government.

Who paid for the adjustment?

Last December 10, with the arrival of Javier Milei to the Rivadavia chair, all the indices of the economy were subject to the fiscal balance. So much so, that in the first five months of government he accumulates a primary surplus greater than 1% of GDP and a financial surplus of 0.4% of GDPaccording to the Ministry of Economy. However, this positive balance came at the expense of a strong liquidation of pensions and retirements, subsidy cuts and one higher collection of the PAIS tax.

In that sense, the own International Monetary Fund (IMF) warned the Government about the cuts in social items. The thing is that, in fact, the retirements, which came at a very low level, and with the 54% devaluation sank, although with the Amendment to the pension mobility law By decree made by Milei, the assets of the elderly began to recover in May. However, At the junction they lost 8 pointswhich are what Congress intends to return with the modification of the norm.

Poverty and indigence: perspectives for 2024

In the midst of a recessive scenario, the reduction of poverty by the end of 2024 It will depend on the inflation continues on a decelerating path, that investments start coming in and reactivate the economy, according to Salvia. “But we don’t know how much longer this recession will last. If inflation doesn’t come down by tariff adjustments and no investment is generated, Poverty will remain close to 50% and indigence at 15%”he added.

“To lower the poverty, should give up the inflation and generate new jobs with salaries that grow above the CPI, as well as the social programs. So, By the end of the year, poverty is projected to be at a low level close to to the 38%/40% and indigence of 12%as long as a context of is generated inflation drop and “economic revival”Salvia evaluated.

Source: Ambito

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