Mexico's Poverty Will Worsen in 2022
The Economic Commission for Latin America and the Caribbean (ECLAC) announced that more Latin Americans are expected to be pushed into poverty due to inflationary pressures and other negative external economic factors. ECLAC stressed that regardless whether Mexico's economic situation improves or worsens, the country will continue to be the fifth poorest country in the region.
In the ECLAC report “Repercussions in Latin America and the Caribbean of the war in Ukraine: How to Face This New Crisis?”, the organization pointed out that global economic uncertainty, inflation in food and energy, the decline in economic activity and trade in the region as well as governments’ inability to encourage the labor market’s development could increase poverty levels.
“The Latin American region faces difficult internal contexts, characterized by a strong economic slowdown, increases in inflation and a slow and incomplete recovery of the labor markets. This heightens the levels of poverty and extreme poverty. Around 7.8 million people are expected to be added to the 86.4 million whose food security is already at risk,” said Mario Cimoli, Acting Executive Secretary, ECLAC.
In the case of Mexico, Rolando Ocampo, Director of the Statistics Division, ECLAC, said the organization projects that the country will have a 1.3 percent increase in poverty if the national consumer price index (INPC) is maintained and other adverse factors remain similar. However, if the index increases by 2.3 percent, 1.6 million people would suffer from poverty. Meanwhile, if the index increases beyond that percentage, 2.5 million people would sink below the poverty line.
The organization highlighted that regardless of the scenario, Mexico is expected to continue to be the fifth poorest country in Latin America and the Caribbean, surpassed by Honduras, Guatemala, Nicaragua and Colombia.
Cimoli stressed that for Mexico and Latin America to change the landscape, a structural change must be made to develop a new type of production, employment and life. “There must be structural change made to industrial, economic and social policies. Growth cannot occur without changes. Such structural changes are taking place in Europe and the US. Meanwhile, in Mexico or Latin America, we are not moving toward those changes and they are urgently needed”, said Cimoli.
According to Mexico’s latest governmental data, 51.9 million citizens lived in poverty before the COVID-19 pandemic, which raised the figure to 55.7 million. This brought the total population in poverty from 41.9 percent to 43.9 percent. In addition, extreme poverty increased, going from 7 to 8.5 percent.