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Brazil's Poverty Miracle Or Just A Temporary Reprieve?
(MENAFN- The Rio Times) Key Points
Brazil's official poverty rate fell to 23.1% in 2024, the lowest since modern records began, lifting 8.6 million people above the line.
The improvement comes mostly from a hotter jobs market and a surge in cash transfers, not from a broad productivity boom.
Huge gaps between regions, races and informal versus formal workers mean the progress is real but fragile, especially if public spending tightens.
On paper, Brazil just pulled off something remarkable. After the pandemic shock, more than a third of the country was counted as poor. By 2024, that share had dropped to 23.1%.
Around 48.9 million Brazilians now live on less than 6.85 dollars a day, down from 57.6 million the year before. Extreme poverty, people surviving on under 2.15 dollars a day, fell from 9.3 million to 7.4 million.
The story many TV pundits tell stops there. The more interesting story starts with two questions: who really escaped poverty, and why?
First, work has come back. Unemployment has fallen to its lowest level in more than a decade. Millions who were sitting at home in 2021 are now earning again, even if jobs are modest.
When families move above the line because adults are working, they gain income and also independence. Second, cash transfers have grown into a giant safety net.
Programmes that put money directly into poor households' bank accounts now make the difference between extreme poverty and mere poverty for many.
Without these payments, extreme poverty would be roughly three times higher. Effective in the short term, this also leaves a large part of the population depending on decisions in Brasília.
And then there is the fine print. The North and Northeast still concentrate most of the country's poor. Black and brown Brazilians are roughly twice as likely to be poor as whites.
Informal workers and the self-employed face far higher poverty rates than those with formal contracts. The message is clear. Brazil is not sinking; it is climbing slowly.
The real test is whether future growth, private investment and better jobs can take over from emergency-era spending before the bills come due.
Brazil's official poverty rate fell to 23.1% in 2024, the lowest since modern records began, lifting 8.6 million people above the line.
The improvement comes mostly from a hotter jobs market and a surge in cash transfers, not from a broad productivity boom.
Huge gaps between regions, races and informal versus formal workers mean the progress is real but fragile, especially if public spending tightens.
On paper, Brazil just pulled off something remarkable. After the pandemic shock, more than a third of the country was counted as poor. By 2024, that share had dropped to 23.1%.
Around 48.9 million Brazilians now live on less than 6.85 dollars a day, down from 57.6 million the year before. Extreme poverty, people surviving on under 2.15 dollars a day, fell from 9.3 million to 7.4 million.
The story many TV pundits tell stops there. The more interesting story starts with two questions: who really escaped poverty, and why?
First, work has come back. Unemployment has fallen to its lowest level in more than a decade. Millions who were sitting at home in 2021 are now earning again, even if jobs are modest.
When families move above the line because adults are working, they gain income and also independence. Second, cash transfers have grown into a giant safety net.
Programmes that put money directly into poor households' bank accounts now make the difference between extreme poverty and mere poverty for many.
Without these payments, extreme poverty would be roughly three times higher. Effective in the short term, this also leaves a large part of the population depending on decisions in Brasília.
And then there is the fine print. The North and Northeast still concentrate most of the country's poor. Black and brown Brazilians are roughly twice as likely to be poor as whites.
Informal workers and the self-employed face far higher poverty rates than those with formal contracts. The message is clear. Brazil is not sinking; it is climbing slowly.
The real test is whether future growth, private investment and better jobs can take over from emergency-era spending before the bills come due.
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