The global economic recession hit developing country economies less hard than initially expected but, despite positive macroeconomic indicators, there are few reasons to feel optimistic about the impacts on poverty and wellbeing. Based on original research, this article outlines three reasons to believe that the impacts are likely to have been severe for those in poverty. First, the global recession was compounded by the protracted food and fuel price crisis; second, there are early indications of a trend towards increased labour flexibilisation in developing countries; and third, there has been a failure to turn the crisis into an opportunity by extending and improving social protection regimes.