INEI: 1 in 3 Peruvians is at risk of falling into poverty

The monetary poverty in Peru it went from 25.9% in 2021 to 27.5% at the end of 2022, increasing by 1.6 percentage points from one period to another. Thus, a total of 9 million 184,000 Peruvians are considered poor, according to a report from the National Institute of Statistics and Informatics (INEI).

In addition, within this group, 1 million 673,000 people are in extreme poverty, which means that the monthly expense they make does not meet the food requirements that a person needs.

It is important to mention that this group considered poor has a monthly consumption of less than S/415, amount equivalent to the cost of the consumption basket per person.

latent risk

Despite the fact that the results imply a setback of at least 11 years in the fight against poverty, this figure could increase if adequate measures are not implemented.

In this sense, the INEI warns that 10 million 795,000 people are in a situation of vulnerability, that is, 32.3% of the population is at risk of falling into poverty at any time.

“In the case of the vulnerable non-poor, who can fall into poverty due to any event such as job loss, illness or some element of the social environment. We are talking about 1 in 3 Peruvians being vulnerable,” explained Dante Carhuavilca, chief of the INEI.

On this point, Federico Arnillas, president of the Roundtable for the Fight Against Poverty (MCLCP), details that, although the number of vulnerable population fell from 34.6% to 32.3%, this is explained by two reasons: because a large part became poor due to the price increase last year and a few left vulnerability because they had an improvement in their monetary income.

Another important fact revealed by the INEI is that 59.8% of the national population is poor or vulnerable, that is, this situation is experienced by 6 out of 10 Peruvians.

For the MCLCP expert, the mission of the State is that the vulnerable population does not fall into poverty and for this it must implement measures that go in this direction. As well as prioritizing actions for people in extreme poverty.

For this, it will be essential that the national economy grow more than the 2.7% that it had last year and that despite being a positive result could not translate into a reduction in poverty. In addition, it should be considered that there is an estimated growth projection of 2.5% for this year by the Government.

According to Arnillas, economic growth and tax collection will be key so that the State can promote transfer policies towards the poorest sectors.

“One of the things that the State has been doing is the resource transfer mechanisms for low and very low-income sectors, that is part of what must be sustained, but to be able to maintain it is economic and fiscal activity,” he pointed out. .

For his part, Adrián Armas, central manager of economic studies of the Central Reserve Bank of Peru (BCRP) pointed out that in order to bring poverty to pre-coronavirus levels, economic growth is important, since so far this century , the Peruvian macroeconomic strength served to get millions out of this situation.

Along these lines, a few weeks ago the World Bank economist in Peru, Tanja Goodwin, mentioned to La República that the current economic system made it possible to reduce poverty from 59% to 20%. Now where to aim? We are at a key moment where not only those who are poor must be helped, but also those who are in limbo. Otherwise, if the containment measures are not redesigned, the panorama would be even more complicated, according to the specialist.

In cold numbers, 7 out of 10 Peruvians are poor or close to being so, according to World Bank calculations and, therefore, it is vital that aid programs be expanded, since “it is not enough to get them out of the poverty line.” .

Inequality

Federico Arnillas argues that this result of poverty also demonstrates the inequality that exists in Peru, since the increase in prices that was observed in 2022 ended up impacting people with less income, while those who earn more were able to absorb this higher inflation.

“There is an increase in inequality. Inflation has had a more negative impact on the consumption of the poor than it has had on the consumption of the highest income sectors, This can be seen in the analysis by spending deciles,” the expert confirmed to this medium.

Meanwhile, the BCRP official assured that inflation is the worst tax on the poorest, since the increase in prices affects this group more, which dedicates a greater part of its meager income to the purchase of food.

“From the 8.5% price increase seen last year, in food and beverages it was 12.6%. This increase has to do with serious cost problems, for example, of fertilizers”, he added.

Ready measures

After knowing the official results of poverty in Peru, the head of the MEF, Alex Contreras, announced that his office is preparing measures to prevent this indicator from increasing. This plan would be presented within a maximum period of two weeks.

Five regions with poverty greater than 40%

Cajamarca, Huánuco, Puno, Ayacucho and Pasco are the regions with a poverty level greater than 40%. For Federico Arnillas, this result is not new since they are the same jurisdictions as previous years, however, the State is not doing anything to reverse this situation.

The INEI report also reveals that Loreto, Huancavelica, the Constitutional Province of Callao and Piura registered a poverty level of between 30% and 40%.

However, Juan Carlos Odar, director of Phase Consultores, indicated that 625 of every 1,000 Peruvians who entered a situation of poverty during 2022 they live in Metropolitan Lima.

Data

Forecast. According to the Government, poverty would fall to 15% only in 2030.

Historical. The inflation seen in 2022 reached its highest peak since 1996. The BCRP estimates that it will normalize no later than February 2024.

reactions

Dante Carhuavilca, head of the INEI

“In the last year and due to inflation, the cost of the basket has risen 9.7% and, in the same way, the cost of the food basket that determines the level of extreme poverty has risen 12.4%.”

Federico Arnillas, president of the MCLCP

“Inequality in the country is increasing. Inflation has had a more negative impact on the consumption of the poor of those that have occurred in the consumption of the sectors with the highest income”.

X-ray of monetary poverty in Peru