Poorer households reduced their spending and inequality widens

It is not a secret that the pandemic shook all the socioeconomic dimensions of Peru. As a result, we are witnessing how poverty has advanced and now subdues almost 10 million compatriots, according to the National Institute of Statistics and Informatics (INEI). What is the most serious symptom of the matter? The poorest Peruvians spent less during 2022, unlike their counterparts: the richest, but not because the outlook has improved.

In total, compared to 2021, compatriots in the most pronounced poverty deciles reduced their spending on average from S/252 to S/245 and, according to the economist and professor at the Universidad del Pacífico Noelia Bernal, this is due to their loss income, hit mainly by high inflation. While those with better incomes increased from S/2,120 to S/2,167, since they have financing channels, such as the release of pension savings, mainly.

“Expenditure is a variable that is measured based on income. We see that the poorest households reduced their spending because they do not have a job or are in the informal sector. They don’t earn like they used to, and the only way to survive is to reduce their spending. For example, a household that used to buy a chicken a week now buys half a chicken,” he commented for La República. Thus, guiding us from the employment data, despite the recovery of the universe of workers in Peru —close to 17 million people— and the GDP —with a rate of 2.5%, we will be the most vigorous in the region despite prudence of the MEF—, the Covid-19 sank the quality of work and, in Bernal’s opinion, the situation is critical because the inequalities between the richest and those who have less have also widened.

Entities such as the World Bank have previously assured that the only way to reduce poverty in Peru is through economic growth, but Bernal regretted that we have not normalized after the pandemic and, therefore, in this context in which political and natural phenomena affect our growth expectations, the reduction of the precariousness rate “complicates”. The specialist is in favor of making “microeconomic reforms” to reduce the spread of poverty —and not only monetary—, although she also points to variables such as anemia or precarious employment, since “it is not enough to have a job”, but ” we have to make the country grow” to minimize the ravages of the pandemic.

We haven’t made up yet

According to the economist Armando Mendoza, the fact that a third of Peruvians are the most affected by the pandemic and that their income has not recovered reflects the failures of the current economic scheme, in which “growth is not enough.” Despite our good reputation in macro terms, which catapults us as one of the most solid countries in Latin America, we failed to focus our policies to mitigate the 2020 recession, which contributed to widening social differences.

“What has Reactiva Peru been, if not a massive transfer of public funds in favor of businessmen? It was a subsidy in favor of large companies. Those measures taken did not go to the great majorities. It ended up favoring some sectors, ”he said. Mendoza regretted that aid to the sectors “that have the most income” has been normalized and that the rest are left to one side of the equation, even more so when inflation does not recede and affects the economy of households, reducing their ability to pay. expense for matters other than food.

“When will poverty recede in Peru?”

The Government of Dina Boluarte made it official to read poverty from a multidimensional approach. This implies not only paying attention to money, but also ensuring failures in access to water and sanitation, electricity, health and education in Peruvian households. In this line, they estimate that poverty will only fall to 15% —its lowest level in the century, since until 2019 the rate was 20%— in 2030. The experts consulted by this newspaper assure that it is urgent to redesign the solutions towards a urban focus, since poverty now hits this area more. Measures such as Together or With You fulfilled their function and, therefore, they add that it is urgent to make new decisions so as not to exacerbate the problem further.

keys

Income. In 2022, the real monthly income per inhabitant was S/1,089, a slight improvement of S/15 compared to 2021but a setback of more than S/100 versus 2019.