Argentine Poverty Levels Show Size of Macri’s Task

  • Poverty rate was 32.2% in the second quarter, Indec said
  • Macri made eliminating poverty one of three main objectives

Argentine President Mauricio Macri made the elimination of poverty one of his three main objectives when elected in November. With the release of poverty statistics Wednesday, he said that was more of an aspiration than a goal.

About 9 million of Argentina’s urban population, or 32.2 percent, were living below the poverty line in the second quarter, the statistics agency said Wednesday. The report is the first measure of poverty in three years after the previous government stopped publishing the index. About 6.3 percent of people are living in extreme poverty.

In news conference after the figures were released, Macri said he’ll be judged on his ability to reduce poverty and that his blueprint for that is to continue opening up Argentina’s economy to investment and to create “quality” jobs. So far, the reforms he’s prescribed, including lifting currency and trade restrictions and cutting costly subsidies, have had the opposite effect, pushing up unemployment and deepening the economic recession.

“This starting point today is the one by which I want and accept being judged as president,” Macri told reporters at his residence outside Buenos Aires. "It’s obvious we won’t reach zero poverty in four years. We set zero poverty as a path, a path to which we call all Argentinians to join."

Macri said he has already taken other measures to reduce poverty, including a program to build sewage and drinking water networks throughout the country, lowering the age at which children begin school and reducing inflation.

The numbers approximately match private indicators. A report by the Catholic University found poverty had risen to 32.6 percent in April from 29 percent in 2015. The report said that while Macri may need time to turn the economy around, he should mitigate that by providing social programs for the poor.

The poverty index was one of Indec’s most controversial statistics under former President Cristina Fernandez de Kirchner, whose government was the first ever to be censured by the International Monetary Fund for reporting inaccurate data. Fernandez in 2015 claimed the rate was below 5 percent. Her cabinet chief, Anibal Fernandez, defended that figure even in the face of observers who pointed out that this was a lower level than Germany’s.

(Corrects to clarify that number of poor is based on urban population.)
Before it's here, it's on the Bloomberg Terminal.