Mexico | Poverty in periods of economic crisis

Summary

Due to slowing growth and high inflation rates around the world, the World Bank raised concerns about global stagflation. Considering this scenario plus a possible fifth wave of COVID-19, some implications for the population in poverty are analyzed in a press release.

Key points

• Key points:
• In its latest world economic outlook report, the World Bank mentions that there are concerns about global stagflation.
• The World Bank mentions a certain resemblance to what happened in the 1970s, although it indicates that there is a difference in that currently food and energy prices continue to be lower, central banks have properly established inflation targets, have greater autonomy operational and credibility.
• In 1968, the Economic Commission for Latin America and the Caribbean (CEPAL) presented calculations in which 41.7% of the population in Mexico could not purchase a food basket.
• If there is inflation above the increases in per capita income of households and above the number of employed (due to slow growth), it is expected that, in addition to increasing the population in poverty, those currently living in poverty would deepen it.
• The population in poverty could have challenges against: "poverty traps", high dependence on informal debt, employment in the informal sector, shocks in income due to health expenses and/or inability to work due to COVID-19, and deepen if there are vulnerable population in the home or are located in risk areas.

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