In 2023, the population in poverty, who live on the equivalent of $6.85 and are classified in this situation, will be reduced by one percentage point, according to the report. Recent poverty and inequality trends in Latin America and the Caribbean, that was released yesterday by the World Bank.
From 2021 to 2023, the segment living under this condition decreased from 21.8 percent to 20.8 percent.
Last September, the organization made a projection that between 2018 and 2024, 9 million 574 thousand people in Mexico left poverty, even though in that period the economy was hit by the effect of measures against the pandemic, which It caused a contraction of the gross domestic product of 8 percent in 2020.
In the update released yesterday, which already closes the figures for 2023, the organization mentions the group of vulnerable people, which are those who live with incomes between 6.85 and 14 dollars per day, and who face a high risk of falling into poverty due to the eventuality of economic shocks, the reduction was from 38.6, in 2021, to 38.3 percent.
Regarding the middle class, which can spend between 14 and 81 dollars a day, it rose from 38.4 to 39.6 percent in the aforementioned period.
Brazil was the country that reduced poverty the most (3.3 percent), it also did so in the segments of vulnerable people – along with Colombia (0.6 percent in both cases) and raised the middle class by 4 percent, a level only below Dominican Republic (4.7 percent).
In 2023, poverty in Latin America and the Caribbean (LAC) fell to its lowest point so far this century, as one in four people in the region lives with incomes below the countries’ poverty line of upper-middle income that is, with 6.85 dollars per person per day.
The level represents a reduction of 4.7 percentage points in the regional poverty rate between 2021 and 2023, with which 25 percent of the population lives in poverty.
In contrast, the middle class increased steadily, since in 2021 it represented 36 percent of the region’s population and in 2023 it grew to 41.1 percent, which is the highest level so far this century.
The World Bank projects that the proportion of poor will fall from 25 percent in 2023 to 24.7 percent in 2024, while the middle class will rise from 41.1 to 41.4 percent.
Extreme poverty, which represents those who live on less than $2.15 a day, also decreased by one percentage point since 2016, reaching 3.9 percent by 2023.
However, eradicating poverty in LAC would cost at least 99 million dollars a day.
Positive outcomes in the labor market drove the fall in poverty levels in most LAC countries between 2021 and 2023. Almost two-thirds of the reduction is explained by that reason, and public transfers remain an important driver, but its gradual elimination is affecting the income of the most vulnerable households in several countries.
However, modest growth in the region is expected to drive a slight decline in poverty reduction in 2024.
Gross domestic product (GDP) in Latin America and the Caribbean (LAC) grew 2.1 percent in 2023, 0.6 percentage points, and the region is experiencing a period of moderate economic growth.
The World Bank stated that efforts to reduce poverty in LAC depend largely on macroeconomic conditions, since the slow pace registered since 2016 is a reflection of the low levels of economic growth.
Since 2009, Latin America and the Caribbean have had the lowest annualized growth in the world: just 1.9 percent.
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