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Portugal among most unequal countries in OECD

Xinhua, May 22, 2015 Adjust font size:

Portugal has the greatest income disparity and a high level of poverty among countries of the Organisation for Economic Cooperation and Development (OECD), a new report released by the organization said on Thursday.

The Paris-based organization said inequality and poverty rose during the financial crisis, despite the country's Gini coefficient, which measures levels of income inequality (with zero representing perfect equality), dropping from 0.343 to 0.338 between 2011 and 2012.

The report comes as little surprise to analysts here, who have studied the social effects austerity had on society over the past years.

"There were already signs of a growing level of inequality from 2009," sociologist Elisio Estanque from Coimbra University told Xinhua on Thursday. "This report shows that austerity policies imposed by the troika have led to deep social inequalities, with the middle class violently affected by tax hikes, salary cuts, and the freeze of career progressions among other policies."

Portugal is the ninth most unequal country out of the 34 countries OECD measured, with 10 percent of the richest people possessing around 25.9 percent of wealth, and 10 percent of the poorest possessing 2.6 percent of the wealth.

The Portuguese poverty rate went from 12.0 to 12.9 percent and affected mostly children and young people for whom the rates were 17.8 and 15.8 respectively.

The study also highlights that for the first time since 2011, the poverty rate of the elderly did not fall as much as the median.

"It's impossible to lower their pensions even more," Estanque said, referring to the elderly, adding that many older people living in nursing homes returned to their families' households to better cope with the economic situation.

Elderly people in Portugal in 2007 were the age group with the higher incidence of poverty, while in 2011 children and young people took their place, according to the OECD.

Portugal had to dramatically raise taxes and cut spending as part of a 78-billion-euro (87 billion U.S. dollars) bailout package it signed with international lenders in 2011.

According to the report, the wealth gap widened in most developed countries with the income gap at its highest level in 30 years. Endit