Latin America Poverty Hits 33-year Low, but Inequality Prevails

• Latin American poverty levels fell to a 33-year low in 2023, led by progress in Brazil, the United Nations' Economic Commission for Latin America and the Caribbean (ECLAC) said.
• Latin America is marked by high inequality, limited social mobility, and weak social cohesion, underpinned by inadequate social policies and weak protection systems. As such, despite declining poverty rates, income inequality is high, according to the ECLAC report.
• ECLAC defines poverty as affecting those who do not have sufficient income to cover their basic needs, while extreme poverty includes people who do not have enough income to buy a basic food basket.
• Poverty in Latin America decreased in 2023 to affect 27.3% of the population, down 1.5 percentage points from the year before and more than a 5-point drop from 2020, when economies were severely impacted by the COVID-19 pandemic.
• Extreme poverty in the region still affects 10.6% of the region's population. Excluding Brazil, Latam's poverty ratio would have stood at 28.4%, closer to the 2022 figure.
• The report concluded that strengthening social protection systems is the key to adopting an integrated approach that can help reduce poverty and the various causes of inequality and boost social cohesion.
• The International Monetary Fund forecasts that GDP will increase by 2.1% for Latin American economies in 2024, which could potentially aid in further reducing poverty. ECLAC expects poverty to continue falling to 26.8% this year, while extreme poverty will be at 10.4%.

Source: (Reuters)