The sad paradox in Argentina: the economy is growing and so is the number of poor people

On April 30, a three-month-old baby died in front of the bars of the Casa Rosada, in the very Plaza de Mayo in Buenos Aires. He lived on the street with his parents. Her mother said that she woke up at dawn to nurse him and simply found her dead. “When I went to touch her, she no longer had a pulse,” she said. The police guarding the headquarters of the Argentine Government called the emergency services, which found that there was nothing to do. The girl died of poverty the same day that the official statistics office, INDEC, reported that 39.2% of those who live in Argentina earn less than what is necessary to eat properly or pay for decent housing. The rate grows to 50% among those who are under 14 years of age.

Poverty is an evil that has grown like ivy in a society that used to be one of the most prosperous in Latin America. The debacle began in the eighties, military governments through: poverty reached 47% after the hyperinflation of 1989, it shot up to 57.7% with the corralito crisis of 2002 and after a recovery it rose again in 2020 with the pandemic , up to 42.9%. Then it fell slightly, to go up the slope again in the second half of 2022. In this new cycle of rise, a million new poor people were added between last June and December. However, there is a big difference from previous peaks of poverty. Argentina’s GDP grew 10% in 2021 and 5.2% in 2022. All this statistical bonanza was accompanied by a 0.7 point drop in unemployment. If we stick to the numbers, in Argentina only 6.6% of the population is out of work. Why then are there more poor? The problem is in inflation and in the persistent deterioration of the labor market.

The CPI rose 94% in 2022, with the consequent depreciation of the peso against the dollar. In January 2022, 179 pesos were needed to buy a currency in the informal market. 16 months later, 460 pesos are needed, after reaching a record of 495 pesos on Tuesday. This week was especially hard. The peso suffered a harsh market attack and lost 11% of its value in just 48 hours. Despite the efforts of the government of the Peronist Alberto Fernández to control inflation, in March it climbed 7.7%, to 104.3% year-on-year, the highest data since 1991. As inflation grows faster than wages each month a lower middle class that can no longer hold its own in its place in the pyramid falls into poverty. The basic basket, which includes food and essential non-food needs, has risen seven points more than wages since last June.

inflationary hell

The upward trend of the CPI is so fast that, for the first time in the history of Argentina, INDEC considers people who have a white job to be poor. Of course there are those who have it worse. The rise in prices hits informal workers especially hard, who have no unions to fight on their behalf and no right, for example, to a loan. Their income loses purchasing power day by day, while they cannot find clients among those families that no longer paint their apartment or fix their car because they barely make ends meet. Argentines live between the uncertainty of day to day and the fear of hyperinflation like that of 1989, which forced President Raúl Alfonsín to bring forward the handover of power to the Peronist Carlos Menem. The shops are priceless and stop selling their products, investment plans are suspended and families squeeze the budget as best they can. The baby that died a month ago in front of the Casa Rosada is just the symptom of a disease that is eating away at Argentina.

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