A United Nations commission has increased its projection for poverty in Latin America and Caribbean for 2022, citing economic disruptions caused by the conflict in Ukraine.
Latin America and Dominican Republic poverty will rise to 33% of the population this year, a 0.9 percentage point uptick versus 2021. Extreme poverty is seen reaching 14.5% this year, 0.7 percentage point more than in 2021, according to a study published by the UN’s Economic Commission for Latin America and the Caribbean (Eclac).
Higher fuel prices, and fertilizer and wheat supply problems provoked by the war in Ukraine have fanned inflation while intensifying hunger, casting doubts about the region’s growth prospects, the U.N. agency said.
Cepal warned of a significant jump in people in the region deemed food insecure.
“These levels are markedly higher than those observed before the pandemic and make the possibility of a speedy recovery more distant.”
The UN arm has recently cut its estimates for economic growth in Latin America and Caribbean for 2022, citing economic disruptions caused by the conflict in Ukraine.
The mostly Spanish- and Portuguese-speaking region is seen growing 1.8% in 2022, revised down from a prior forecast for growth of 2.1%.
Inflation in Latin America and the Caribbean more than doubled between the end of 2020 and the end of 2021, to 6.6%. Cepal projects that consumer prices will rise 8.1% during the 12-month period ended in April 2022.
The region’s economies were seeing a slowdown this year in growth and trade even before Russia’s invasion of Ukraine in late February, as well as the persistent drag of the coronavirus pandemic.
Latin American countries face “internal contexts characterized by a strong slowdown in economic activity, increases in inflation and a slow and incomplete recovery of labor markets, which increases poverty and inequality,” the report said.