Peru’s Poverty Rate Falls to 22.7 Percent

Peru’s poverty rate fell again in 2014, according to the latest government statistics released on Thursday.  The rate, however, is the lowest in several years — 1.9 percent— which is a direct result of the slower growth of the GDP, at 2.4 percent in 2014.

The national statistics institute, INEI, said Peru’s poverty rate declined to 22.7 percent in 2014 from 23.9 percent the previous year.

According to INEI, 289,000 people managed to rise above poverty last year, leaving some 6.99 million people still living below the poverty line.

As in previous years, the decline in poverty was most evident in rural areas, where the poverty rate is far higher than in urban centers. Last year, the rural poverty rate fell to 46 percent from 48 percent in 2013, with the Andean highlands remaining the most poor of Peru’s three geographical regions, which also include the coast and the Amazon rainforest. Just over 15 percent of the urban population was poor last year, according to the agency.

The extreme poverty rate fell to 4.3 percent from 4.7 percent in 2013. That is down from 9.5 percent in 2009, when the overall poverty rate totaled 33.5 percent.   Much of this improvement in extreme poverty areas has been due to the government’s social programs through the Ministry of Social Development and Inclusion,  established during this administration.

Peru’s economic boom has led poverty levels to fall steadily since 2004, when they were at over 58 percent. That boom eased last year, with the gross domestic product expanding 2.35 percent, down from rates of around 6 percent in prior years due to lower prices for mineral exports.

The Finance Ministry said Thursday that 1.3 million people have escaped poverty in the past four years. President Ollanta Humala’s administration, which came to office in 2011, has focused on expanding social programs in order to help the poor who haven’t benefited from the economic growth.

Finance Minister Alonso Segura, a former chief economist for Peru’s largest bank, BCP, said that 63 percent of the reduction in the poverty rate from 2011 to 2014 could be explained by the economic growth, with the remaining explained by social programs targeting the poor.

But as economic growth slowed last year, 87% of the reduction in the poverty in that year could be explained by social programs, Segura said, according to daily Gestion.

“Since 2011, as a product of the inclusive policy that was put into place by the government, social spending has increased significantly, but in targeted actions focused towards essential issues like health, improvement in nutrition of children… among others,” Segura said.

Social Development and Inclusion minister Paola Bustamante said that some 450,000 people were able to escape poverty thanks to social programs, but added that new initiatives need to be created.

“We have to strengthen the current technical criteria,” she said.

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One Comment

  1. Wonderful numbers, BUT what is important is the details. In various areas of Peru, what monthly income lifts you out of the poverty level? Per adult or per family of X persons? What about all the “informal” so-called workers which could be more than 50% of the adult/working population.

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