A UN report indicates that poverty in Latin America has reached a 33-year low, yet inequality remains a significant issue

In 2023, poverty levels in Latin America reached a 33-year low, driven by advancements in Brazil, according to a report released by the United Nations’ Economic Commission for Latin America and the Caribbean (ECLAC) on Tuesday, despite the ongoing issue of significant inequality in the region.

ECLAC stated that Latin America is characterized by significant inequality, restricted social mobility, and fragile social cohesion, which are supported by insufficient social policies and weak protection systems.

ECLAC defines poverty as the condition of individuals lacking adequate income to meet their essential needs, whereas extreme poverty refers to those who cannot afford a basic food basket.

THE SIGNIFICANCE

Over 170 million individuals in the region experience the challenges of poverty, with Haiti, Nicaragua, and Honduras being particularly impacted.

According to the ECLAC report, income inequality remains high, even as poverty rates decline.

STATISTICAL OVERVIEW

Poverty in Latin America decreased in 2023, affecting 27.3% of the population, which is a reduction of 1.5 percentage points from the previous year and over a 5-point decline from 2020, when economies faced significant challenges due to the COVID-19 pandemic, according to ECLAC.

In the region, 10.6% of the population continues to be impacted by extreme poverty.

Without Brazil, Latam’s poverty ratio would have been 28.4%, aligning more closely with the 2022 figure.

IMPORTANT QUOTATIONS

The report indicated that the reduction in poverty at a regional level in 2023 is primarily attributed to Brazil, which accounted for approximately 80% of the observed decline in the regional average.

The report concluded that enhancing social protection systems is essential for implementing an integrated approach that can effectively reduce poverty, address the various causes of inequality, and promote social cohesion.

CONTEXT

While Brazil made strides forward, Honduras and Peru experienced a rise in poverty due to insufficient financing, increased instability, and civil unrest in 2023.

FORWARD

The International Monetary Fund projects a 2.1% GDP growth for Latin American economies in 2024, which may help in further alleviating poverty.

ECLAC anticipates a decline in poverty to 26.8% this year, with extreme poverty projected at 10.4%.

In Brazil, a country at the forefront of poverty reduction, the government anticipates a GDP growth of 3.2% for this year.