Mexico's poverty rate falls to 43.5% in 4 yrs as remittances almost double

The poverty rate in Mexico has declined from 49.9 per cent of the population in 2018 to 43.5 per cent in 2022, according to a study published Thursday by the country's poverty analysis agency.

The study by the agency, known as Coneval, showed a decline in a key measure of poverty over the four-year period. The reduction means there were 5.7 million fewer people who reported incomes below the market basket for basics like food and clothing.

It was unclear what was behind the reduction in poverty.

President Andrs Manuel Lpez Obrador took office in December 2018, and since then has more than doubled the country's minimum wage. The minimum wage was equivalent to about $4.50 per day in 2018, and now buys about $12, in part due to the appreciation of the Mexican peso against the dollar.

 

But remittances the money sent home by Mexicans working abroad have also almost doubled in the same period, going from around $33.5 billion in 2018 to an annual rate of about $60 billion in 2023, based on numbers for the first half of the year.

Experts say most remittances go to some of the poorest families in Mexico, and the money is mainly used to help them get by.

It was not all good news. The agency also reported that extreme poverty defined as people who do not have enough income even to buy enough food edged up from 7 per cent of the population in 2018 to 7.1 per cent in 2022. Because of the increase in overall population, that meant that extreme poverty cases rose from 8.7 million people in 2018 to 9.1 million in 2022.

Lpez Obrador also introduced supplementary pension payments for people over 65 and scholarship or apprenticeship programmes for youths. But because those programmes are not means-tested they are given to anyone who qualifies, regardless of income level it is not clear whether they have particularly helped the poorest Mexicans.

There was also a surprising increase in the number of people reporting money problems relating to health care. That number rose from 16.2 per cent of the population in 2018 to 39.1 per cent in 2022. The agency said in a previous report on the growth of that number in 2020 that the increase may be due to the widespread restructuring of the health care system under Lpez Obrador, and the effects of the coronavirus pandemic.

During the pandemic, many Mexicans had to seek treatment at private hospitals and clinics because government-run hospitals were full.

As has long been the case, the north of Mexico was generally less poor, while the southern states of Chiapas, Guerrero, Oaxaca, Puebla and Tlaxcala were the poorest. The first three states have very high Indigenous populations.