Kirchnerism did it: the last time GDP grew and poverty increased was in the Menem era

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In 2022, the economic pie has increased, and yet the cast was worse. The number of poor people is greater and that only means that the benefits of the 5.2% GDP growth have not reached the pockets. The last time a similar model was registered in Argentina –growing economy and poverty– which took place under the government of Carlos Menem. Then, from 1999 to 2021, in all the years in which there was an expansion of economic activity, poverty decreased. With the Kirchner government, that line is now being broken.

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Yesterday, INDEC published that the rate measuring the number of people living in poverty rose from 37.3% to 39.2% between 2021 and 2022. Per capita income (GDP per capita) increased by 3% according to International Monetary Fund statistics.

“GDP measures the formal economy, which has grown and more or less follows inflation. The poor live on the income of informality which is not reflected in the GDP”, explains Jorge Colina, economist at Idesa. In 2022, the wages of informal workers increased by 65.4%. The poverty line 112%.

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The year in which similar behavior was recorded was 1996: per capita income increased by 4.3% and poverty rose to 43.6% (from 42%) according to a long series prepared by the Center for the Distribution, Labor and Social Affairs of the University of La Plata (indec poverty gave him 27.9% but also increasing).

In 1996 the economy emerged from what has been called the Tequila Effect, a banking crisis in Mexico following the devaluation of its currency, which ended up impacting indebted, emerging economies such as Argentina at the time .

The country recovered quickly from those ups and downs. But the consequences remained. There was a period of growth at Chinese rates between 1996 and 1999, but its benefits did not spill over to the poorest. Unemployment has increased by 6 percentage points in two years. About 500,000 jobs have disappeared in 24 months. The proportion of the population with a job decreased by 2 points. Precariousness among the employed has increased by more than 7 points. All while the economy grew, expanded and inflation was almost zero (sometimes there was even deflation). Until 1999, the year in which per capita income contracted by 4.4% (and would have been for four consecutive years).

Menem managed to keep the economy going until the end of his mandate. Not only because they lent him money, but also because the impact of the real devaluation hit just before he left. Otherwise it would have ended up like Kirchnerism: recession, poverty and allegations of corruption.

Source: Clarin

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