More poverty and misery ahead for most Argentines as food prices soar
An Argentine household needs a monthly income of at least 100,000 Pesos equivalent to US$ 781 at the official rate, (128 Pesos to the dollar) or US$ 454 (free market, 220 Pesos to the dollar) to remain just above the poverty line, according to the latest estimate from the government’s Stats Office, Indec.
Estimates are based on the so called Total Basic Basket which includes food and basic services, at May values, for a family made up of a couple and two children trying to survive.
To avoid the indigence red line, a household needs some 45,000 Pesos a month (May values), which is equivalent to US$ 351, at the official exchange rate, and US$ 205, at the free exchange rate. Estimates are based on the Basic Food Basket, which only includes food to satisfy minimum monthly demands, again for a family of four.
The Total Basic Basket reached 100,000 Pesos in May, with an annualized inflation of 54,66%, six points less than official overall inflation of 60%. Compared to April the increase was 4,6% and in the first five months of the year 30,9%.
However the Total Food Basket value climbed 62,26% in the last twelve months, having jumped 4,6% from April and 35% since January. This is because the Total Food Basket referred to lower income families, only includes food, which have increased 64% on a twelve month period. In other words not only are these households slipping just above the indigence line but also spend all their income in food, which suffers the greatest impact.
The Total Basic Basket on the other hand is exposed to lesser impacts since it includes other less volatile items such as services.
Indec figures reveal that the poorest families, on the verge of indigence suffer the full bashing of food prices, and according to Indec, –which is most concerning–, during the first two weeks of June food prices increases have remained with their strong upward trend, despite government pressure on suppliers and distributors to contain hikes.
To this must be added the higher price of fuel and energy which became effective June first, with a direct impact on transport costs.
Estimates are that the official poverty rate, at 37,3% of the overall Argentine population at the end of the second half of 2021, will jump higher at the end of June, first half of 2022.