Inflation for the poorest families, in 2021 in Colombia, was 6.85%.
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January 08, 2022 – 12 :21 AM m.
2022-01-08
2022-01-08
The general increase in prices during the last year, as a result of international phenomena such as problems in the supply chains that have made Some inputs, or local situations such as the national strike, have driven up the value that consumers pay for the products of the basic basket in the country. And although inflation in 2021 stood at 5.62%, for the poor and vulnerable households, the perception of price increases is stronger.
(See: Inflation in 2021 closed at 5.62%, the highest figure in five years
This is due to the weighting that families have according to their income level for different products. This is how for last year, while inflation in middle-class families manifested itself as an increase in prices of 5.78%, very close to that of total inflation, in rich families was 4.39%, while the poor already the vulnerable were hit by a price hike of 6.85%,
more than one percentage point above the total national inflation.
“The inflation gap between high-income and poor and vulnerable households was approximately 2.5 percentage points, a gap that we had not seen in the last three years”, indicated the director of Dane, Juan Daniel Oviedo, who explained that this gap is associated with two very important elements: the greater weight that have food and rents and public services within the basket of households in a situation of population prayer and vulnerability.
Thus, the differential perception in inflation, according to income, has to do with the weighting that certain expenses have within the family baskets in relation to their purchasing power.
(See: Can the economy grow with a drop in the peso and a rise in inflation?).
While at a general level food weighs around a quarter of the basket, 24.8%, in households living in poverty, food weighs 31% of your expenses. Something similar happens with rents and public services, which for all households on average weigh around 33%, while for households in a situation of poverty they weigh 40.17% of the basic basket.
(See: Inflation in Colombia would be low compared to other countries).
POVERTY FIGURES
The latest poverty figures Figures published by the statistical entity show how during 2020, and as a result of the pandemic, monetary poverty in the country increased by 6.8 percentage points. This is because while in 2019 35.7% of the population was classified as poor, in 2020 it reached 42.5%, which implies that in that reference year there were 21 million people who were in a situation of poverty. monetary poverty, or below the line of $331,688 income per month.
In addition, in 2020, 3.5 million entered poverty compared to 2019. In the case of extreme monetary poverty, this was 15.1% of the national total in 2020, with 7.5 million people earning less than $145,004 per month. (See: Potato, oil and meat, the foods with the highest inflation).
“ This higher increase in inflation, in this case 6.85% per year for poor and vulnerable households, which it is demonstrated Rare is that the evolution of the poverty lines is going to be much more accelerated to the extent that what is generating inflation are the components that weigh the most within this situation of poverty and vulnerability, such as food”, assured Oviedo.
Likewise, according to Roberto Angulo, founding partner of the Inclusion SAS firm, “the level of inflation is not good news, since it does not anticipate a good outlook for the path of poverty reduction in the recovery”.
According to Angulo, two forces compete in reducing poverty, “ one in favor of reduction, which is economic growth and household wealth, and a force against reduction of poverty, which is inflation”.
According to the expert, before the pandemic, inflation offset about half of the effect of growth. “If this inflation is unusually high, similar to what happened in 2016, then it is likely to offset more than half of the gains from the recovery of poor households during 2021.”
(See: Leases, tolls and the UVR, on the rise due to the effect of inflation).
Therefore, Angulo assured that the next poverty figure to be delivered the Dane “ the result it may be uncertain, because with such high inflation among the poor, we cannot anticipate whether the poverty figure is going to decrease, increase, or stay put”.
HIGHEST IN FIVE YEARS
LAURA LUCIA BECERRA ELEJALDE
Portfolio Journalist
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