The poverty rate in the City of Buenos Aires increased by 2.4 percent in the second quarter of 2018 and clocked in at 18.4 percent, according to a new report from the City’s statistics agency. This means that 74,000 people fell under the poverty line during this time period, with the total number being 565,000.
The destitution rate, on its end, increased to 5.6 percent. This means that between April and June this year, 41,000 people in the City stopped being able to afford the so-called basic foods basket, the series of products whose value determines the destitution line.
Besides measuring the poverty and destitution, the city’s index also divides the “non-poor” in different sectors, in an attempt to determine the percentage of the population that could fall under these lines in the near future. The report determined that 9.4 percent of the population was in the “non-poor but vulnerable,” sector, while another 8.5 percent was part of the “fragile middle class.”
“If faced by a decrease in the household’s purchasing power by, for example, price increases above their income, or the loss of employment, they have a high chance of falling to the lower strati,” the index’s definition explains.
There are chances a significant percentage of people in these groups has already fallen under the poverty line, considering the negative effects the run on the peso has had in the real economy during the past months: high inflation rates and a reduction in the employment rate, to name the two most important. Looking at the rest of the population, 51.1 percent of the City’s residents are considered to be middle class, while the remaining 12.6 percent is part of the upper class.
This index’s results show a sharp contrast with the one released by the Indec national statistics agency last week, which indicated that the city’s rate clocked in at 11.2. The main difference lies on the criteria used to determine the poverty line: while the Indec does not take into account the cost of rent, the City agency does.
Considering that the first national tenants account – carried out early this year – determined that 35 percent of the City’s residents rent a property, and in average use 41 percent of their income to pay for it, it is not surprising the figure is higher.