Argentina closed pandemic year with one of Latin America’s highest poverty rates

RIO DE JANEIRO, BRAZIL – According to an Economic Commission for Latin America and the Caribbean (ECLAC) study, in 2020 the number of poor in Latin America and the Caribbean rose to 209 million, 22 million more than the year before. Argentina posts the highest figures in the Southern Cone.

In 2020, the pandemic crisis hit Latin America hard, to the point of being the most affected region overall, even above other countries with lower incomes, which resulted in a sharp poverty rise.

According to the International Monetary Fund (IMF) outlook, the GDP in Latin America and the Caribbean collapsed by 7.4% last year, while the euro zone fell by 7.2%, emerging Asia by 1.1%, the Middle East and Central Asia by 3.2% and sub-Saharan Africa by 2.6%.

The consequences in terms of poverty and extreme poverty did not go unnoticed: according to ECLAC, the poverty rate closed the year at 33.7% and extreme poverty at 12.5%. As a result, the crisis has left 209 million people in poverty (22 million more than in 2019), of which 78 million are in extreme poverty (8 million more than a year ago).

In its annual 2020 Social Panorama for Latin America report, ECLAC conducted a country-by-country study on the impact on poverty, in which Argentina emerges as one of the most affected economies.

“In terms of poverty rates, one must go back to 2008 to find a similar rate (33.5%), which implies a 12-year setback for the region. This decline is even higher in the case of extreme poverty, as one must go back 20 years, to 2000, to find a similar rate,” the study highlighted.

Poverty in Argentina climbed from 27.2% to 37% between late 2019 and late 2020, ECLAC estimated, although if government assistance to households had not been taken into account, the rate would have climbed to 38.8%. Of this portion, 8.1% is below the extreme poverty line, which government assistance cushions to 5.4%. In 2019, ECLAC recorded a rate of 4.2%.

Thus, Argentina posts one of the worst poverty figures in the region, while in terms of extreme poverty it is notably below the average.

However, in a section of the report, ECLAC highlighted the scope and speed of the US$10,000 Emergency Family Income (IFE) implementation, which the government transferred to lower-income segments during the pandemic at a bimonthly rate.

In terms of extreme poverty, Bolivia and Colombia are well above Argentina, with rates of 14.7% and 16.9% respectively (17% and 19.1% excluding assistance), followed by Ecuador with 12.8% (13% excluding assistance) and Paraguay, with 6.2% (6.9%).

Considering the average for Latin America, it is not very far from Argentina, reaching a rate of 33.7% (37.2% excluding assistance), while in terms of extreme poverty it is well below the average, at 12.5% (15.8% excluding assistance).

Although Argentina is well above the Southern Cone countries, the ECLAC study includes Central American countries, most of which have the worst records in the series, with poverty figures above 50%. The exceptions are Costa Rica, Panama and the Dominican Republic, which post figures well below the average.

Uruguay posted the best figures: from a poverty rate of 3% in late 2019, it rose to 5.1% (5.3% excluding assistance), while extreme poverty increased from 0.1% to 0.3% (0.4% excluding assistance).

Source: El Cronista