José Manuel Salazar-Xirinachs, the Executive Secretary of the United Nations Economic Commission for Latin America and the Caribbean (Cepal), projects a potential slowdown in Latin America’s poverty reduction by 2023.
This deceleration is attributed majorly to a global economic slowdown.
Latest data from Cepal suggests Latin America and the Caribbean could witness an average growth rate of just 1.2% this year.
While an upward revision is expected, the growth remains significantly low, affecting the improvement prospects for the region’s most vulnerable households.
In November, detailed insights will be presented in Cepal’s forthcoming “Social Outlook for Latin America and the Caribbean” report.
Previously, Cepal’s forecast indicated 32.1% of the population in the region living in poverty, with 13.1% in extreme poverty.
Though this indicates a slight reduction in overall poverty compared to 2021, extreme poverty numbers have increased. Salazar-Xirinachs mentioned this is not encouraging news.
Highlighting a positive note, Salazar-Xirinachs commended Chile, where poverty rates dropped from 10.7% in 2020 to 6.5% in 2022. This reduction was attributed to government assistance during the pandemic.
In discussing Chile’s success, Salazar-Xirinachs emphasized the importance of long-term policies, robust social protection systems, and fiscal responsiveness.
However, he also stressed that applying Chile’s formula universally might not be feasible due to varied institutional capacities across countries.
Conclusively, for significant poverty reduction, countries should focus on creating quality jobs.
It not only effectively reduces poverty but also minimizes the cost of social policies. Furthermore, inflation control across the region is influenced by external factors, such as supply chain disruptions and global price surges.
Though inflation might decrease by the end of 2023, it’s expected to remain above the average of the pre-pandemic era (2015-2019) at 4.3%.