UNAM study estimates virus has left 16 million more in extreme poverty

July 11, 2020

Study says more cash needed to alleviate extreme poverty.

At least 16 million more Mexicans are estimated to have fallen into extreme poverty between February and May of this year, a new study shows.

The research paper produced by Curtis Huffman and Héctor Nájera of Mexico’s National Autonomous University (UNAM) looked at the effects of the coronavirus on the economy and is the “worst-case scenario” identified so far for Mexico’s poor.

The study estimates that the number of Mexicans in extreme poverty has risen from 22 million to 38 million, and builds on estimates by the social development agency Coneval.

On May 11, Coneval published a study in which it presented a first approximation of the impact of Covid-19, which showed that up to 10.7 million Mexicans could fall into poverty by the end of 2020 due to the health crisis and its economic consequences.

The UNAM study concludes that government financial assistance is necessary, highlighting “the urgency of making additional income transfers to this population in the coming weeks.”

The researchers found that providing at least 450 pesos per person per month, about US $20, to those in extreme poverty would prevent them from going hungry. Extreme poverty as defined by Coneval is the inability of those living in urban areas to purchase a minimum of 1,632 pesos (US $73) per month of basic food items.

The cost of implementing such a program is estimated to be 19 billion pesos per month, around US $847 million, which represents 0.9% of Mexico’s gross domestic product, the study said.