São Paulo, Brazil – In 2023, Brazil reached a milestone in its fight against poverty, reducing poverty and extreme poverty rates to the lowest levels since 2012, when the Brazilian Institute of Geography and Statistics (IBGE) began conducting annual surveys on this topic.
Data published by IBGE last week revealed a significant improvement: from 2022 to 2023, the percentage of Brazilians living below the World Bank’s poverty line – defined as a monthly per capita household income below US$110 – fell from 31.6% to 27.4%.
This marks the lowest rate ever recorded. In absolute terms, the number of people living in poverty fell from 67.7 million to 59 million, meaning that 8.7 million individuals rose above the poverty line in just one year.
Similarly, the percentage of people living in extreme poverty – earning less than $35 a month – fell from 5.9% to 4.4%. This is the lowest level since 2012, and the first time the rate has fallen below 5%. In numerical terms, this represents 3.1 million fewer people in extreme poverty: from 12.6 million in 2022 to 9.5 million in 2023.
IBGE experts and researchers have attributed this progress to two main factors: the expansion of social assistance programs, such as Bolsa Família, targeting those in extreme poverty and improvements in employment levels, which have benefited those living below the threshold of poverty.
(Tânia Rêgo/Agência Brasil)
The role of Bolsa Familia
Bolsa Família, a flagship program by President Luiz Inácio Lula da Silva that was first established in 2003, currently provides support to over 20.7 million Brazilian families. The program — a version of which continued during Jair Bolsonaro’s administration under the name Auxílio Brasil — offers financial assistance tailored to family needs, such as the number of children, with an average monthly payment of BRL 684.27 (USD 113).
Pedro Fernando Nery, a prominent economist and legislative consultant for Brazil’s Federal Senate, emphasized Bolsa Família’s critical role in lifting millions of people out of poverty. In an interview with Brazil reportsNery, who is the author of the book Extremes – A map to understand inequalities in Brazil (Extremes – A map to understand inequalities in Brazil), noted:
“In five years, six million Brazilians have escaped extreme poverty, even amid the negative impacts of the pandemic. No one would have imagined this in 2019, at the end of a decade marked by stagnation in the fight against poverty and extreme poverty. Brazil’s extreme poverty rate has fallen by 40% since the pre-pandemic period. The combination of a strong labor market and the significant expansion of Bolsa Família following the emergency aid programs is key to this progress.”
Economist Raul Krauser added that Bolsa Familia has an economic multiplier effect, especially in vulnerable communities. Speaking of Brazil reportsKrauser explained that funds from the program tend to flow locally, especially among small businesses, creating jobs and generating income.
“When it increases people’s purchasing power, it stimulates the local economy. This drives a range of services, activities and initiatives, driving job creation and poverty reduction,” said Krauser.
Brazil’s labor market has also shown significant improvement. Data from the IBGE released at the end of November showed that the country’s unemployment rate had fallen to 6.2%, the lowest level since the historic series began in 2012.
Krauser explained that social programs and job creation often reinforce each other.
“It’s a self-reinforcing cycle. Expanding social transfer programs stimulates local economies, creating jobs and reducing unemployment. In turn, increased employment levels significantly reduce poverty and extreme poverty,” Krauser said.
Challenges ahead
Despite the positive developments, experts warn that Brazil still faces significant challenges in addressing inequality.
“Brazil lags behind its Southern Cone neighbors in poverty and extreme poverty indicators,” Nery said. “Our poverty rate is five times higher than that of Chile and four times higher than that of Uruguay. The percentage of people living in extreme poverty is three times that of Paraguay or Argentina.
There are still significant losses in public spending and progress in strategic areas, such as early childhood development, remains slow. We need a serious national policy to tackle poverty comprehensively,” he added.
For those who have recently escaped poverty, continued social mobility will depend on additional measures. Krauser emphasized the importance of professional training and education to support long-term progress.
“To empower vulnerable populations, we must advance education and skill-building initiatives. With the rapid changes brought about by automation and artificial intelligence, the labor market will face profound transformations. Preparing for these shifts is essential,” Krauser said.
