07/20/2021 11:31 PM
Updated 07/21/2021 7:34 AM
In various international measurements, Argentina has been
ranked very badly
when considering how the authorities of each country faced the health and economic crisis derived from the pandemic.
This is also reflected in a recent World Bank report.
The work estimates that 1.7 million Argentines fell out of the middle class last year.
The figure comes from evaluating the data from the INDEC Permanent Household Survey, which is representative only for the 31 urban areas where 29.8 million people live.
The World Bank technicians who participated in the preparation of this report told
“Estimates for Argentina show that
before the pandemic around 51% of the population
(represented in the survey) was in the middle class.
This is around 14.7 million people.
Under this logic, in 2020, after the economic crisis caused by the pandemic and the mitigating effects of the response through social programs, an approximate of
1.7 million people
would have left the middle class ”.
The report says that the portion of people included in the middle class
dropped from 51% of the population to 45%.
If the estimate were extended to the total Argentine population, the number of fallen from the middle class would quietly be around
2 million people.
To define a middle-class person, the report indicates that within this socio-economic group are people who had incomes of
between $ 13 and $ 70 per day,
"purchasing power parity
The PPP thing applies because in Argentina things are cheaper than in the United States.
In other words, with 10 dollars at the official or parallel exchange rate, more things are bought in Argentina than in the United States with the same 10 dollars.
The PPP factor is used to adjust for these differences.
The COVID-19 pandemic had
in Latin America, which registered, at the end of July,
more than 37 million cases and close to 1.1 million deaths.
The quarantines in turn wreaked
havoc in economic terms that had not been seen for a long time
The World Bank report focuses on the impact of the pandemic on the continent's middle class.
: “The slow rise and sudden fall of the middle class in Latin America and the Caribbean”
There it marks the contrast between the expansion of the middle classes in the region that had been observed, with more and less, until 2019 and the
due to the virus.
Two conclusions from the report
Two conclusions from the report
- “The 2020 crisis is likely to
reverse in a short time many of the social achievements that took decades to materialize
in Latin America and the Caribbean.
In the last two decades, the region has seen the number of people living in poverty reduced by almost half and the size of its middle class increased. ”
- In 2019, Latin America was a predominantly middle-class region, with 38 percent of its population, approximately 230 million people, achieving middle-class status.
However, this socioeconomic group is projected to have declined to 37.3 percent of the population in 2020, representing
a net loss of 4.7 million middle-class people.
In Argentina, the economic impact of the pandemic on the middle class occurred at various levels.
Many people were unable to go out to work,
especially self-employed, self-employed or monotributistas.
Not to mention the informal sector.
entry of women
, in many cases forced to stay at home to care for their children, who in turn were unable to attend school for much of the past year.
However, the World Bank report admits that
without palliative measures, the exit of the middle class could have reached more people.
For palliative measures, in the case of Argentina, mention should be made, among others, of the IFE, the supplementary bonuses for beneficiaries of the AUH and other social plans, the ATPs and the Alimentar Card, for example.
The damage to Argentina was perhaps more serious, compared to most of the countries in the region, because it found the country with an economy that was already in recession and with serious operating problems.
Without the possibility of taking on debt in the capital markets, the government was forced to
substantially increase public spending
to compensate - very partially - the economic sectors hardest hit by the quarantine, both companies and their workers.
A part of this expense was financed with debt in pesos, another with pesos issued by the Central Bank.
The monetary issue of 2020 is what keeps inflation still very high in 2021 and what explains part of the rise in poverty projections, which
could reach 50% by the end of the year
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