Peru poverty rate dropped last year 5.2 percentage points to 39.3 percent

President Alan Garcia lauded a report by the National Statistics Institute that showed Peru’s poverty rate dropped more than 5 percentage points in 2007. But he also warned Peruvians that the figures could be fleeting.

“Just as there can be hiccups of growth that later drop, there too can be hiccups of poverty reduction that later convert back to the earlier tragic reality,” Garcia said Tuesday during a news conference at the Government Palace. “I therefore call for caution and prudence.”

“What we need to do is consolidate, organize and fortify what we achieved last year,” he said.

Garcia warned that rising world prices for oil threaten Peru’s sustained economic growth, and he called for a push to forge ahead and complete natural gas projects.

“Only with sustained and permanent economic growth can we reduce poverty,” he said, adding a pledge to continue funding social programs to help Peru’s neediest people.

The report, based in part on a nationwide survey of 20,000 people, showed the poverty reduction was greatest in urban areas, where it dropped from 31.2 percent in 2006 to 25.7 percent in 2007, and to a lesser extent in rural zones, where there was an overall 4.7 percentage point decrease to 64.6 percent.

“The figures need to be analyzed, but at first glance they are a very positive indicator of sustained economic growth over a period of time at high levels,” said Felipe Jaramillo, the World Bank’s representative for Peru, Bolivia and Ecuador. Peru’s gross domestic product grew 8.3 percent last year.

Renán Quispe, director of the National Statistics Institute, added that government social programs, including direct cash aid of 100 soles, or about $28 per month, to Peru’s poorest families also played a role in reducing overall poverty.

Rural areas along Pacific coast saw the greatest contraction of poverty — 10.9 percentage points from 49 percent to 38.1 percentage points — attributed to Peru’s booming agro-industrial sector. In jungle towns and cities, there was a 9.6 percentage point drop reported, from 49.9 percent to 40.3 percent.

“This reduction can be associated directly with the growing economic development in the agro-exports sector, reflecting for example job growth, bank credit, tax base, provisional savings and the importation of capital gains,” Agriculture Minister Ismael Benavides was quoted saying in daily El Comercio.

President Alan Garcia’s Cabinet Chief Jorge Del Castillo said the report showed the country was on track to reach the government’s goal to reduce poverty to 30 percent by 2011.

According to the report, extreme poverty, in which Peruvians survive on less than $35.50 per month, dropped in 2007 to 13.7 percent, a 2.4 percentage point decrease from 2006.

The highland Department of Huancavelica, 125 miles southeast of the capital, Lima, continues to be Peru’s poorest region, with a poverty rate of 85.7 percent.

In Lima, poverty decreased 5.7 percentage points to 18.5 percent.

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