Poverty breaks records in Mexico due to the economic crisis


More than 11 million Mexicans are not making enough to pay the basic food basket

In Mexico, more than 11 million people are not enough to buy the products of the basic basket. And is that the COVID-19 pandemic has represented a very hard blow to the economy of families because it caused an increase in working poverty in much of the country, an aspect that also had an impact on the inequality gap.

The National Council for the Evaluation of Social Development Policy (Coneval)announced that during the first quarter of the year, in which the health emergency due to the pandemic had not yet begun, by the third quarter, the percentage of the population in working poverty It went from 35.7 to 44.5%, which represents the highest quarterly level since 2005, the year in which Coneval started this record.

Working poverty refers to the percentage of the population that has an income less than the value of the basic food basket. According to the Council, This item skyrocketed during the pandemic due to job losses, as well as increases in the cost of staple foods.

In addition, real labor income per capita had a decrease of 12.3% between the first quarter and the third of 2020. Compared with the same period of 2019, a drop of 6.7% was identified since it went from 1,794.87 pesos to 1,675.21 pesos per month, which is the lowest level since the last quarter of 2017, when it stood at 1,669 pesos.

(Photo: Rashide Fria / Cuartoscuro)(Photo: Rashide Fria / Cuartoscuro)

During this period, there was also an increase in the National Consumer Price Index in relation to that registered in 2019. This is due to the fact that the average annual inflation was at 3.9%, while from July to September of last year it was at 3.3. percent.

The foregoing, said the agency, could be due to the increase in the prices of certain goods for daily use, such as fruits and vegetables, as well as energy.

However, the federal government continues to point out that a good economic strategy was applied to avoid the arrival of COVID-19 in Mexico.

This Sunday, in his message at the G20 Leaders’ Summit, which takes place virtually, President Andrés Manuel López Obrador indicated: “It was useful for us to abandon the economic recipes applied during the neoliberal period, starting by discarding the strategy of indebting to the people to rescue those above, now it was different ”.

The president thus referred to the indebtedness that countries have had since the health emergency due to the Covid-19 pandemic, which, he said, grew on average by 20%; and considered the future threat to economic stability and social welfare, if it is not addressed from now on.

“The debt grew from the pandemic by an average of 20%, and if we do not address this issue from now on, in the future it will become another threat to economic stability and social welfare,” he said.

But the economic impact of the pandemic at the national level has been quite large. Another indicator of this is the unemployment figure. Currently over one million jobs have been lost across the country. 

This is due to the fact that many small and medium-sized companies (SMEs) did not resist the decline represented by the Sana Distancia Day and were forced to close – between April and June there were more than 10,000 that closed -, or in a Little more encouraging case, they were forced to cut their workforce.

People crowd while they make long lines at the union building of the Mexican Social Security Institute (IMSS) in search of employment, in Ciudad de M & # 233; xico (M & # 233; xico).  EFE / S & # 225; shenka Guti & # 233; rrez / Archive
People crowd while they make long lines at the union building of the Mexican Social Security Institute (IMSS) in search of employment, in Ciudad de Mexico

Gabriela Siller, director of economic and financial analysis at Banco Base, commented to Infobae that to have made the economic impact less drastic, it was necessary “a countercyclical fiscal policy where resources could have been redirected, mainly from large infrastructure projects that this administration has focused on shorter-term projects precisely focused on the states and industries most severely affected by the pandemic.

However, the expert also clarified that even without a pandemic, negative economic levels would have been registered at this point,  as well as an increase in unemployment levels.

“This is the worst crisis since the Great Depression, caused in part by the COVID-19 pandemic,  and in part also by the economic inertia that was already being experienced in Mexico, ” Siller said, explaining that the disappointing figures in the country, Prior to the virus, they were the consequence of the loss of business confidence and falls in gross fixed investment.

Source: infobae.com

Mexico Daily Post