The Latin American Network for Economic and Social Justice (Latindadd) warned that the public policies proposed by the Peruvian Government to reduce the new poverty rates have no correlation with the cuts announced to maintain its fiscal deficit ceiling.
We stop because 29% of the population is poor and 31.4% can fall into poverty just by losing their job. Furthermore, 7 out of 10 monetary poor live in urban areas.
According to official data from the National Institute of Statistics and Informatics (INEI), in 2023, monetary poverty affected 29% of the population (9 million 780,000 people) and 31.4% (10 million 590,000 people) were in condition of monetary vulnerability, that is, they can fall into poverty if they lose their job or are affected by an adverse phenomenon that reduces their income.
The line between the poor and the non-poor is very thin. In Peru, 6 out of 10 people are poor or vulnerable to falling into poverty, according to the latest INEI report.
“As long as there are no reforms that seek a more progressive tax system and priority is given to allocating resources towards improving people’s quality of life, more of the population will fall into poverty,” said Rodolfo Bejarano, an analyst at Latindadd.
At the end of last year, the Ministry of Economy carried out questionable maneuvers in order to meet its goal of closing 2023 with a fiscal deficit of 2.4% of GDP, but it did not achieve it and closed at 2.8%.
In this regard, the specialist highlighted that the government’s mismanagement of public finances and its eagerness to comply with fiscal rules ends up affecting the most vulnerable population.
“When it comes to complying with fiscal rules, actions focus on the spending side, with restrictive measures that affect the sectors that depend to a greater extent on the services provided by the State and prioritizing the payment of financial obligations, But working to increase tax revenue is not addressed on any side,” Bejarano highlighted.
Latindadd: poverty has become urbanized
In recent years, the urbanization of poverty has accelerated. Today in Peru, seven out of ten poor people live in urban areas. Despite this, the rural poor are still poorer than the urban ones, indicated the Latindadd specialist based on INEI figures.
According to the INEI report, in 2023, 73.1% of the poor are in urban areas and 26.9% in rural areas; According to natural region, 51.4% are on the coast, 34.9% in the mountains and 13.7% in the jungle.
Likewise, the population living in extreme poverty is mostly found in the rural areas of the country, representing 55.1%. The non-poor population in a condition of monetary vulnerability is mostly found in the urban area of the country, reaching 72.2%.
When comparing poverty indicators between the years 2019 and 2023, it appears that the percentage of poor people located in urban areas grew by 16.4 percentage points (from 56.7% to 73.1%); Likewise, the percentage of the extremely poor population located in urban areas increased by 18.7 percentage points (from 26.2% to 44.9%).
On the other hand, the vulnerable non-poor population located in urban areas increased by 1.4 percentage points (from 70.8% to 72.2%). That is, 72% of the non-poor population that can fall into poverty, for example, by losing their job, lives in urban areas.
A no small detail is that between 2009 and 2023, poverty increased significantly in Metropolitan Lima and the Constitutional Province of Callao by 14.5 percentage points, going from 14.2% to 28.7%. That is, poverty affects 3 out of every 10 inhabitants of Lima and Callao.
“It is essential to make decisions to reverse the situation of economic stagnation and the neglect of social protection that exists in Peru. Despite the poor results in terms of economic growth, the premise of the Peruvian government continues to be to show good macroeconomic figures and to try to give a good image of the country to the markets and investors,” warned the economist engineer Bejarano.
Source: Larepublica
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