World Bank highlights poverty reduction in Brazil during pandemic

The Economic Report for Latin America and the Caribbean released by the World Bank, this Tuesday (4), pointed out that Brazil had a better recovery than other Latin American countries in reducing poverty during the pandemic.

The study highlighted that in Brazil, cash transfers increased the size of the middle class by 2.1, and that the support of the federal government – namely former President Jair Bolsonaro – prevented many people from “crossed” the threshold for poverty. “The country not only prevented families from falling into poverty, but also lifted many people out of poverty in 2020”, says the IDB.

According to the World Bank, the effects of the pandemic influenced the poverty rate in Brazil, which increased from 29.7% in 2019 to 34.4% in 2020, with approximately 19 million people entering a situation of serious economic and social vulnerability. . However, actions to protect the most vulnerable, such as offering emergency aid, prevented a greater increase than in other countries.

The proportion of people in Latin America earning less than US$6.85 a day was 29.7% in 2019, not counting Brazil. During the first year of the pandemic, it rose to 34.4% in 2020, dropped to 31.4% in 2021 and to 31% in 2022. When Brazil is included in the calculation, the percentages in the report are much lower: 28.4 % in 2019; 28.6% in 2020; 31% in 2021; and 28.8% in 2022.

Regarding the Brazilian GDP, the World Bank anticipates that it will grow approximately 0.8% this year, while it estimates that growth in 2022 will have been 2.9%. Similar to other countries in Latin America and the Caribbean, part of the reason Brazil’s increase is not higher is that high taxes and poor economic stability make the market “less attractive to investors”.