Chile, Brazil and Barbados Lead Social Spending in LatAm

Daniel Salazar Castellanos’s report shows that Latin America’s public social spending soared during the pandemic, addressing the economic and social crisis.

This investment, crucial for services like education and health, is now decreasing.

In 2022, Latin America’s central government social spending fell to 11.5% of GDP from 13.4% in 2020, as per the Economic Commission for Latin America and the Caribbean (ECLAC).

Pre-pandemic, in 2019, it was at 11.2%, dipping to its lowest at 9.8% in 2008.

In 2022, social protection received the most funds (4.3% of GDP), followed by education (3.7%), health (2.6%), housing (0.5%), and culture (0.1%).

ECLAC’s 2023 report indicates this decrease might stem from reduced spending and increased GDP growth in these countries.

The report also expresses concern over the sustainability of these social policies, noting the disparity in spending.

Three countries exceeded 14.5% of their GDP on social expenditure, while others stayed below 10%.

Chile (17.9%), Brazil (16.4%), and Barbados (14.6%) led in spending, in contrast to Mexico (10.2%) and Panama (10%), with the lowest.

Regionally, South America topped the 2022 expenditure chart at 13.2%, followed by the Caribbean (11.5%) and Central America (9.5%).

ECLAC’s analysis revealed a 7.3% drop in per capita social spending to $1,251 among 22 countries.

South America saw a significant $177 decrease (-11.7%), and Central America, Mexico, and the Dominican Republic experienced a $21 fall (-2.8%).

The Bahamas allocated the most per person ($3,113), followed by Chile ($2,924). Uruguay and Barbados spent between $1,961 and $2,597 per person.

In the lower bracket, Argentina, Brazil, Costa Rica, and Guyana spent between $1,390 and $1,606 per person.

Colombia, Ecuador, and Jamaica were even lower, ranging from $478 to $966 per person.

Guatemala, Honduras, and Nicaragua were at the bottom, spending between $198 and $365 per person.

Guyana saw the largest annual increase (20.2%), while Guatemala (4.4%) and Mexico (3.8%) also showed growth.

Chile (-26.5%), Honduras (-19%), and Colombia (-15.9%) faced sharp declines.

The report raises concerns about Honduras and Nicaragua (-9.9%), which were previously among the lowest in government social spending.