Extreme poverty to rise for first time in more than 20 years due to COVID-19, World Bank warns

Because of the pandemic, as many as 9.4 per cent of the world's population could live in extreme poverty this year — an increase from the 9.2 per cent in 2017.

This would be the first regression since 1998 when many Asian countries were dealing with a deep financial crisis.

Had the pandemic not taken place, the poverty rate was expected to drop to 7.9% in 2020.

"In order to reverse this serious setback to development progress and poverty reduction, countries will need to prepare for a different economy post-COVID, by allowing capital, labour, skills, and innovation to move into new businesses and sectors," World Bank Group President David Malpass said.

According to the World Bank report, while many of the new poor will be in countries with already high poverty rates, a number middle income countries will also see big increases in extreme poverty. It estimates that 82 per cent of the total number of people living in extreme poverty will be in middle-income countries.

It also stressed that although COVID-19 is having a huge impact, progress on reducing global poverty had slowed over the past few years with annual drops of 0.5 per cent between 2015 and 2017 compared to yearly reductions of around 1 per cent between 1990 and 2015.

Furthermore, it emphasised that while less than 10 per cent of the world lives on less than $1.90 a day, close to a quarter lives with less $3.20 (€2.70) and more than 40 per cent live with less than $5.50 (€4.70).

This two threshold represent poverty lines in lower-middle-income and upper-middle-income countries.

Further resources:

Global Action Urgently Needed to Halt Historic Threats to Poverty Reduction - World Bank

Poverty and Shared Prosperity 2020: Reversals of Fortune - reliefweb

Original source: euronews

Image credit: Some rights reserved by International Monetary Fund, flickr creative commons