World Bank: a third of Peruvians would continue in poverty

With the pandemic, Poverty in Peru reached 30% of the population —almost 10 million citizens— and after the statistical rebound of 2021, it fell to 25.9% —just over 8 million people.

Despite the qualities and strengths of our economy highlighted on more than one occasion by the Government, it is difficult to return to the 20% threshold seen before the pandemic. According to the World Bank, more than a third of the population will continue to live in poverty in the medium term as a result of the economic slowdown, inflation and high labor informality (see infographic).

The weight of the constant crisis

The multilateral entity warns that 31.8% of the Peruvian population lives in households with incomes below the poverty —US$6.85 a day per person, in his opinion— and 37.7% are vulnerable and at risk of becoming poor.

They recognize that Peru “faces significant internal and external risks” such as the continued social unrest, which could curb exports and private investment in a scenario in which inflation will take longer to come down; while, globally, the prices of raw materials fall and the costs of food and energy rise.

Likewise, the World Bank is not so optimistic about the performance of the GDP for this year, and believes that it will grow 2.4%, a rate below the average before the coronavirus; while from the Ministry of Economy and Finance (MEF) they point to 3.1% despite the dense outlook and place us as one of the fastest growing economies in the region.

The economic slowdown would be explained by political uncertainty and the stagnation of real wages. By 2025, they estimate that GDP will still develop below 3%, and, with this, the recovery of income will also go at a snail’s pace with greater emphasis on female labor (see infographic).

It is worth noting that the World Bank’s reading differs to some extent from the BBVA Research, which estimates a poverty ratio in Peru of 25.5% to 26.5% until 2027. Meanwhile, the Government of Dina Boluarte has proposed to return to 20% only around 2030.

Why will it take so long to get out of poverty?

Silvana Vargas, former head of the Ministry of Development and Social Inclusion (Midis) and a PUCP teacher, points out that the population has been neglected by not improving the quality of employment, and, with this, households are supported by low wages.

“Audacious measures are not taken to contain poverty at the immediate level. There are announcements of initiatives such as the expansion of social programs or the design of some, but there is no deployment of content or concrete actions”, argued for The Republic.

Vargas recalls that the labor market has not recovered pre-pandemic levels if one considers that of the 17.7 million workers, one million entered the underemployment Compared to 2019 —that is, they work fewer hours and/or earn less than the average—, which is why there are now 8.4 million people.

Bet on a more faithful review

Javier Herrera, an IRD researcher, recalled that the World Bank’s analysis does not use the parameters used by the INEI to prepare its poverty report —which would come out no later than May, he added—, and therefore, “not based on real data” about the reality of homes.

Vargas, for his part, stated that there is a methodological problem in measuring poverty, and now it remains to implement the multidimensional approach proposed by the Boluarte regime to “intervene more directly” and put an end to the deficiencies of the population in the access to housing, health, education, etc.

Poverty would remain above pre-pandemic levels, according to the World Bank