Brazil virus payout cuts extreme poverty to least in decades

BRASILIA, Brazil (AP) — Brazil’s extreme poverty has plunged due to a monthly federal handout during the coronavirus pandemic, but threatens to bounce back once the government ceases the stopgap welfare program, a report said Tuesday.

The study by the Getulio Vargas Foundation, a university and think tank, said the number of Brazilians living in extreme poverty fell to 6.9 million in June, or 3.3% of Brazil’s population — the lowest level since the late 1970s. As this year began, 6.2% Brazilians were in extreme poverty, the study said.

“Although we can’t directly compare the figures because of recent methodological changes on the government’s database, we can say it’s one of the lowest proportions ever recorded,” Daniel Duque, the study’s author, said by phone from Rio de Janeiro. He used the World Bank standard that classifies anyone earning less than $1.90 a day to be in extreme poverty.

The federal government since April has doled out $115 monthly to informal-sector workers and micro businesses affected by the pandemic, with single mothers receiving double. Duque and other experts say that helped alleviate poverty in a nation riven by inequality, with average monthly income last year at $280, according to the statistics institute.

The experts warned, however, that the relief is temporary and the number of impoverished Brazilians will rise after the last payment, currently slated for August.

“No question we are in a transitory situation. We won’t have this volume of income transfer forever," Duque said. "I think it is very likely we will return to previous poverty levels. I fear we can go back to even worse levels if the labor market doesn't recover.”

The payments have already cost the government more than $32 billion and President Jair Bolsonaro’s economy minister, Paulo Guedes, has...