Coronavirus aid sees Brazil’s poverty rates drop to lowest level since 2004

Despite significant improvement in the 2000s, levels of extreme poverty shot up during Brazil’s economic crisis of 2015 and 2016. Now, according to a study carried out by think-tank Fundação Getúlio Vargas, the number of severely impoverished people in the country has fallen to its lowest level in at least 16 years, thanks to the emergency aid program implemented by the Jair Bolsonaro government to soften the immediate financial blow of the Covid-19 pandemic.

The level of extreme poverty — understood as families living on less than USD 1.90 per day — fell to 3.3 percent of the population in June, a dramatic drop from the 6.9 percent recorded last year. Meanwhile, the rate of households earning less than USD 5.50 a day dropped to 21.7 percent, down almost four percentage points from June 2019.

The study even highlights a reduction in poverty levels between May and June of this year, as the emergency aid program began reaching more families. Some 50 percent of the population received the benefit in June, compared to 45 percent in May. 

Economist Daniel Duque, the author of the study, mentions that without the benefit Brazil would probably have seen its inequality levels deepen during the pandemic, as wealthier strata of the population saw their income grow without receiving the...