Agustín Salvia, director of the Social Debt Observatory at the Argentine Catholic University (UCA), questioned on April 4 the accuracy of recent official poverty statistics. Salvia said that the reported decrease in poverty includes a “methodological fiction” and does not indicate an actual improvement in purchasing power for Argentine households.
The issue is important because it concerns how poverty is measured and understood in Argentina. Official figures can influence public policy and perceptions about economic recovery or decline.
Salvia explained that there is a gap between reality and statistical reporting because Argentina’s National Institute of Statistics and Censuses (Indec) uses outdated consumption baskets based on data from 2004 and 2005. He said, “People are not feeling in their pockets that they have more purchasing power. On the contrary, consumption of dairy products, yerba mate, and basic goods is falling.” He also pointed out that utility costs for electricity, gas, water, and transportation now take up a much larger share of income than they did two decades ago.
According to Salvia, there is a “problem of realism” with current measurements. When improved income data are compared against an old consumption basket, results show dramatic decreases in poverty rates that he called unrealistic. “People stop being poor statistically because they can pay for services but not because they have greater purchasing power,” he said.
Looking ahead to later this year, Salvia warned that the fourth quarter could show worsening conditions with poverty near 30 percent. He believes lower middle-class families are most affected as they cut spending on health care, education, and home maintenance to cover rising utility bills. “We are crystallizing a structural poverty rate of 25% or 30% in a context of stagnant private employment and increased informality,” Salvia concluded.
