Argentina’s poverty rate reached 40.1% in the first semester of 2023 — affecting 11.8 million people — according to a report by the National Institute for Statistics and Census (INDEC) released on Wednesday. 

The number is 3.6 percentage points higher than in the same period last year, meaning that 1.2 million more people live under the poverty line. The INDEC highlighted that 56.2% of children under 14 are poor, according to the latest figures.

The poverty figure is the highest since the first semester of 2021 when the country was still recovering from the effects of the COVID-19 pandemic which slashed 10% of GDP.

Destitution, on the other hand, affects 9.3% of the Argentine population, a growth of 0.5 points compared to the first semester of 2022. The INDEC considers that a family is “destitute” when their monthly income is less than the basic food basket. A family is considered to be in poverty if they earn less than the basic food basket plus services, known as the total basic basket.

The Center of Argentine Economic Politics (CEPA) think tank published a study later on Tuesday saying that there are a variety of factors at play. The main one is that food inflation in the first semester of the year averaged 7.7% per month — it averaged 5.8% in the first semester of 2022.

“Since the price of food determines the cost of the food basket and, to a large extent, of the total basic basket, a significant increase in food inflation implies upward pressure on the destitution rate and, in part, of the poverty rate,” the report said.

Salaries also explain the growth in poverty. The CEPA report mentioned an increase in the phenomenon of “poor workers.” In August 2023, the median wage only covered 85.6% of the basic basket, meaning that full-time registered workers can also be under the poverty line. 

Unemployment in the second quarter of 2023 was a record-low 6.2%, according to an INDEC report published last week.

“Getting a job is not the problem, but rather keeping it or getting one that pays enough to sustain a certain living standard,” a report by Ecolatina said.

On Tuesday, the INDEC published July’s Monthly Estimate of Economic Activity (EMAE, by its Spanish initials). It decreased by 1.3% compared to the same period in 2022 and 2023’s budget forecasts a 2.5% decrease in the GDP for this year, indicating an even deeper recession.

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