Argentina: poverty closed 2022 at 40% with no recovery since the pandemic 

The signs of economic and social crisis are getting stronger by the month.

The economist and Director of the Master in Econometrics at Torcuato Di Tella University, Martín González-Rozada, published the latest results of his Nowcast of poverty and concluded that the indicator closed the year 2022 at 39.6% of the population.

This metric is constructed from the monthly publications of the INDEC CPI and the report of the total basic food basket measured by the same agency.

Poverty regained the upward path since May 2022 and has notoriously deepened since the moment of the brutal inflationary and exchange rate outburst during the short-lived administration of former Economy Minister Silvina Batakis.

INDEC will officially announce the semi-annual metric for poverty in March, corresponding to the second half of last year.

All estimates find a very strong correlation between the onset of the recession on economic activity and the increase in marginality.

The latest Nowcast survey suggests that poverty would have climbed to 40.5% in January 2023, thus accumulating a jump of 5.4 percentage points since April 2022.

Likewise, so far, during the presidency of Alberto Fernández and Cristina Kirchner, poverty has accumulated a sharp increase of 5 percentage points, starting from a situation that was already extremely delicate in 2019 after two consecutive years of recession.

For the conformation of poverty, there are two main explanatory factors: inflation (and the rising cost of living) and unemployment.

The current increase in social marginality is explained almost entirely by the deterioration of real incomes.

Inflation rose to 98.8% year-on-year in January 2023 and set the highest record since October 1991.

President Fernández blamed the pandemic and the war in Ukraine for all the problems his administration could not respond to.

The pandemic has been over for almost two years, but poverty and inflation show no sign of real improvement or moderation.

With a similar diagnosis, the economist of CEDLAS and the National University of La Plata, Leopoldo Tornarolli, constructed a series of poverty disaggregated into two sectors: salaried workers in the formal sector (public and private) and those in the informal sector.

The results are dramatic.

The economist estimates that up to 44.8% of informal wage earners are in poverty, at least in the measurement corresponding to the third quarter of last year.

It accumulates an increase of more than 3 percentage points with respect to the fourth quarter of 2019, the base on which the current administration started.

Poverty among formal wage earners represented 16%, but since the arrival of Kirchnerism to power, the gap between the public and private sectors (in favor of the former) has increased significantly.

Poverty in the formal private sector has increased from 15% to 18% so far during the Fernández administration, while in the public sector, it has fluctuated between 10% and 11% of the total.

With information from Derecha Diario