Governments globally are coming under immense pressure to cushion the blow of surging food and fuel prices. In Latin America, the response risks igniting a tinderbox.
From Mexico to Brazil, persistently high inflation is widening the gap between rich and poor in what is already the world’s most unequal region. It’s stoking political upheaval that could be a foretaste of what lies ahead as policymakers the world over struggle to meet demands to increase social spending.
Across Latin America, a burgeoning middle class is seeing its prospects eroded. For society’s poorest, the latest wave of consumer price increases will be a full percentage point higher than for the richest, estimates by the Economic Commission for Latin America and the Caribbean show. One-third of the entire region is poised to meet the criteria for poverty, defined as those living on $1.90 a day.