2023-10-06 21:48:00
Constant price increases mean that state income and allocations are not enough to cover basic needs. However, the Alimentar Card helps alleviate the situation, according to a report by Ecolatina.
The cost of the Basic Food Basket (CBA) rose 17% in August, 4.7 percentage points above inflation, reaching $42.262; while the Total Basic Basket (CBT) showed an increase of 14.3%, exceeding GBA inflation by 2 percentage points and placing it at $92.132.
Likewise, if the year-on-year evolution of the CPI and the baskets is compared, both the CBA and the CBT also grew above inflation (+21.2 percentage points and +12.5 percentage points respectively).
In a context of accelerating inflation characterized by increases in food prices, accessing the needs measured by baskets becomes increasingly difficult.
According to a report, the Universal Child Allowance (AUH), which has a value of $13.861covers an increasingly smaller proportion of the CBA: in August, It only met 47% of a child’s caloric needsin contrast to the maximum in recent times, in December 2021, which with the ANSES bonus covered a 168% from the basket.
“However, the poor coverage of the CBA is reversed if the Alimentar Card granted to the beneficiaries of the AUH is considered. ($17.000 for families with one child). In this case, it is possible to cover the 104% of a child’s CBA,” explained the consultant.
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“If we look at the data series since January 2022, we can notice a trend in which the Universal Child Allowance (AUH) was not enough to cover the cost of the Basic Food Basket for a child. Consequently, During all the months a reinforcement was necessary through the Alimentar Card to achieve complete coverage of food needs,” he explained.
At the same time, A family income composed of two minimum wages and two AUH is not enough to cover the family CBT, which places families in a situation of poverty.
This trend was recurring in recent years but deepened starting in August 2022, following the economic-financial crisis within the framework of the resignation of former Minister of Economy Martín Guzmán.
“During 2022 and so far in 2023, The income of a typical family covered on average 90% of the CBT. To address this situation, it was necessary to implement reinforcement through the Alimentar Card which, on average, contributed to meeting the basic needs of families in those years,” the report stated.
What is expected going forward?
“Although the drought problem is beginning to reverse, the same cannot be said regarding the increase in food prices, which is currently impacted by the devaluation following the PASO. It is important to keep in mind that a devaluation mainly affects tradable products, including food.”, assured Ecolatina.
“In this way it directly hits the basic food basket, making its increase even greater than the general price level and generating a significant impact on the income of low-income families. “This phenomenon is due to the fact that general inflation takes into account other factors, such as non-tradable and regulated goods, which are not as vulnerable to devaluation in the short term,” he added.
In this framework, the Minister of Economy, Sergio Massa, launched a series of measures with the aim of offsetting the impact of the acceleration of inflation on income such as the reinforcement of the Alimentar Card, VAT refund, tax relief for monotributistas , among other.
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“Although these measures seek to recover the purchasing power of households, it is necessary to evaluate whether the bonuses and increases in retirements, pensions and the Universal Child Allowance (AUH) are sufficient to face the accelerated increase in food prices. basic basket”, considered Ecolatina.
Even so, the social context is very fragile: Poverty reached 40.1% of the population in the first half of 2023, prior to the impact of the recent devaluation, and is expected to continue rising in the second half of the year.
Likewise, poverty reached more than half (56.2%) of children from 0 to 14 years old, this being the age group with the largest number of poor people.
Meanwhile, in September, the GBA Ecolatina CPI registered a monthly increase of 12,4%while the Food and Beverages category increased by 14%.
“In this context, It is expected that the trend of increasing basket prices above inflation will continue. We do not expect an improvement in the situation for 2024. The future correction of relative prices will have an immediate impact on inflation and on the price of food in particular,” the report stated.
“It is essential that the implementation of a stabilization plan, in addition to contemplating the fiscal-monetary and exchange pillar, has income policies as one of its pillars, including better targeting of fiscal policy and price and salary agreements that contribute to a sustained improvement in living conditions,” he concluded.
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