Public spending in LatAm: which countries allocate the most money to social programs?

Bloomberg Línea — Although during the pandemic public social spending experienced record figures in the midst of the economic and social crisis, this injection of resources, which It is vital to finance education, housing, health policies, among other services.has been cutting back in Latin America.

The central government’s social spending reached 11.5% of GDP in 2022, which meant a decline compared to the level registered in 2020 of 13.4%according to updated figures from the Economic Commission for Latin America and the Caribbean (ECLAC).

Public social spending as a percentage of GDP in Latin America was 13.8% in 2021. In 2019, before the pandemic, it was 11.2%.

In recent years, the lowest level was recorded in 2008 (9.8%).

In Latin America and the Caribbean, the majority of public social spending in 2022 was allocated to financing social protection (4.3% of GDP), education (3.7%), health (2.6%), housing and community services (0.5%) and recreation, culture and religion (0.1%).

In his report on the Social Panorama of Latin America and the Caribbean 2023ECLAC suggests that the decline in public social spending in 2022 “would be the result of both a decrease in the real amounts of spending and a recovery in the countries’ GDP growth rate.”

In any case, the fall in public spending could mean “a warning sign regarding the financial sustainability of social policies in the countries of the region.”

One of the conclusions is that “the heterogeneity of public social spending by the central government continues to be a characteristic in the region, with three countries that exceeded 14.5% of GDP”.

On the other hand, several others remain below 10% of GDP.

The Latin American and Caribbean countries with the highest central government social spending as a percentage of GDP are:

• Chile: 17,9%
• Brazil: 16,4%
• Barbados: 14,6%
• Bolivia: 14,5%
• Argentina: 13,5%

And those with the least public social spending are:

• Mexico: 10,2%
• Panama: 10%
• Dominican Republic: 8,6%
• Honduras: 7,8%
• Guatemala and Guyana: 7,7%

By subregions, the highest public social spending in 2022 was recorded in South America (13.2%), followed by the Caribbean (11.5%) and Central America (9.5%).

ECLAC also analyzed the evolution of social spending per person and found that In 2022, an average of US$1,251 was recorded among the 22 countries in the region (in constant values ​​in 2018 dollars), with a drop of 7.3% compared to 2021.

The average for South America decreased by US$177 (-11.7%) and in the group formed by the countries of Central America, Mexico and the Dominican Republic this decreased by US$21 on average (-2.8%).

By country, you have to Bahamas It is the country that allocated the most resources per person to public social spending in the last year (US$3,113), followed by Chile (US$2,924).

In a second block of countries there is Uruguay, Barbados and Trinidad and Tobago, where spending is between US$1,961 and US$2,597.

Below is a group made up of Argentina, Brazil, Costa Rica and Guyanawhere public social spending per person is between US$1,390 and US$1,606.

In the range of between US$478 and US$966 are Colombia, Ecuador, El Salvador, Jamaica, Mexico, Paraguay, Peru and the Dominican Republic.

Finally, they are in a range of between US$198 and US$365 per person Guatemala, Honduras and Nicaragua.

“Guyana was the country that presented the highest interannual variation in this indicator, with an increase of 20.2%. They are followed at a significant distance by Guatemala (4.4%), Mexico (3.8%), Brazil (3%) and Jamaica (2.9%).”says ECLAC.

On the other hand, it stands out that the most pronounced decreases were evident in Chile (-26.5%), Honduras (-19%) and Colombia (-15.9%).

However, “the significant falls in Honduras and Nicaragua (-9.9%)countries previously grouped as those with the lowest social spending by the central government,” says the text.