Sunday, September 21, 2014

Argentina’s poverty risks rise — World Bank

Argentina risks quadrupling its poverty level as the economy stalls, 

Bloomberg News reported on Friday, that those living on $4-$10 per day, or 33 per cent of Argentina’s
 population as of 2012, are vulnerable to falling into poverty in the case of an adverse shock, according to 
the World Bank’s 2015-2018 report on the South American nation.
The poverty rate for the country’s 43 million people may increase to more than 40 per cent from about 
11 per cent, it said.
“Strengthening macroeconomic resilience, improving the business environment, and boosting investor
 confidence will be critical to fostering investment and expanding and sustaining the employment
 thereby generated,” the report said.
Argentina defaulted on its international bonds July 30 after a United States judge blocked a 
$539m interest payment until the government pays so-called holdouts from a 2001 default in full. 
South America’s second-largest economy contracted in the first quarter while the annual inflation 
rate is about 40 per cent.
The greatest vulnerability to poverty arises in periods of economic crises or prolonged sluggish growth, 
which reduces employment and earnings and limit the ability of the government to finance social programs
 that directly support the poor, according to the World Bank report dated August 7 and made public last week.
The institution approved lending Argentina as much as $4.8bn through 2018 as the nation’s reserves dwindle.
Economy Ministry press official Jesica Rey didn’t respond to an e-mail from Bloomberg News seeking 
comment on the report.
About half of the 2,400 people interviewed in a September 2-9 Management & Fit poll said Argentina’s
economic conditions will be worse or much worse in the coming months. Fifty-two percen
 considered employment as their main concern, the Argentine consulting firm’s survey showed.
Argentina will receive $1bn to $1.2bn per year in loans for social development, the Washington-based
 lender said September 9 in an e-mailed statement. The World Bank’s IFC will also invest $1.7bn
 in export-oriented private companies ranging from agribusiness, energy and infrastructure to
 financial institutions.

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