Peru : Monetary poverty increased to 29% in 2023

The monetary poverty rate increased from 27.5% in 2022 to 29.0% in 2023 (BBVA Research estimate published in March of this year: 29.1%), moving further away from the pre-pandemic level (the lowest in 16 years) and returning to a record similar to that of 2010-2011.

Key points

• Key points:
• The extreme monetary poverty rate increased from 5.0% in 2022 to 5.7% in 2023, almost doubling the incidence reported in 2019, and reflecting deterioration in indicators related to food and health.
• Own calculations find that higher prices contributed to poverty increasing by 1 percentage point (pp) with respect to 2022, while lower transfers did so by 0.6 pp. Thus, the slow recovery of the labor market and the increase in some remittances to families only offset the incidence of monetary poverty by 0.1 pp.
• The vulnerable monetary population, those who overcome poverty but have a high probability of falling into it, reached 31.4% in 2023 (10.6 million people), lower than that recorded in 2022 (10.8 million), partly because some went from being vulnerable in 2022 to being monetarily poor in 2023.
• There are important differences in labor informality and access to the financial system. While only 39% of the poor and informal population had access to the financial system, the formal non-vulnerable are approaching full financial inclusion.
• Going forward, to reduce poverty Peru will need to relaunch the policies and reforms that generated an adequate environment for investment and growth.

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