Publication: The Gradual Rise and Rapid Decline of the Middle Class in Latin America and the Caribbean
Date
2021-05-20
ISSN
Published
2021-05-20
Author(s)
World Bank
Abstract
Latin America and the Caribbean (LAC)
reported over 30 million Coronavirus (COVID-19) cases and
around 960,000 deaths as of May 2021. Official tracking data
shows that Brazil, Colombia, and Argentina have the highest
number of reported cases throughout LAC, which in turn is
the region with among the highest numbers across all
developing regions. Moreover, Brazil is the third-worst
affected country worldwide, after the United States and
India, with approximately 15.4 million infections. Dramatic
declines in economic activity are expected throughout the
LAC region due to the global pandemic. Unfortunately, many
LAC countries entered the crisis with low potential economic
growth and high levels of inequality, following the region’s
recent period of stagnant growth. The 2020 COVID-19 crisis
will likely reverse in a short time frame many of the social
gains that took decades to materialize in Latin America and
the Caribbean. In the past two decades, the region has seen
a reduction in the number of people living in poverty by
nearly half and an increase in the size of its middle class.
Income inequality also decreased, as income growth has been
primarily pro-poor in recent years. Despite variations
across countries, most have experienced positive welfare
gains since the early 2000s. However, the growth
deceleration of 2014–2019 coupled with the dramatic fall in
activity caused by the COVID-19 crisis will negatively
impact living standards and well-being across the region.
Poverty projections for 2020 suggest that the number of the
poor increased in most LAC countries. Brazil, however,
implemented a generous emergency transfer program that
benefited almost 67 million people and lifted millions out
of poverty. As a result, poverty in the LAC region is
expected to decline marginally from 22 percent in 2019 to
21.8 percent in 2020. Had no mitigation measures been
implemented, the region may instead have seen 28 million new
poor in 2020.
Citation
“World Bank. 2021. The Gradual Rise and Rapid Decline of the Middle Class in Latin America and the Caribbean. © World Bank, Washington, DC. http://openknowledge.worldbank.org/handle/10986/35834 License: CC BY 3.0 IGO.”