WASHINGTON, October 5, 2022—The world will meet the goal of ending extreme poverty by 2030 in the absence of a traditionally challenging rate of economic expansion for the rest of this decade, according to a new World Bank study. The study shows that COVID-19 has caused the biggest setback to global poverty alleviation efforts since 1990 and that the war in Ukraine threatens to make matters worse.
The Bank’s latest Poverty and Shared Prosperity Report provides the first comprehensive review of the global poverty landscape following the regular series of shocks to the global economy in recent years. The pandemic pushed an estimated 70 million people into extreme poverty in 2020. the largest annual accumulation since global poverty tracking began in 1990. As a result, about 719 million people were living on less than $2. 15 per day at the end of 2020.
“Progress in reducing excessive poverty has necessarily stalled alongside slow global economic growth,” said World Bank Group President David Malpass. “Our project is about increasing excessive poverty and declining shared prosperity caused by inflation, the broader overlapping crises facing development. This means a bleak outlook for billions of other people around the world. Changes in macroeconomic policy are needed to allocate global capital, promote financial stability, reduce inflation, and stimulate the median source of income growth. The prestige quo: slowing global growth, emerging interest rates, greater aversion to threats, and fragility in many emerging countries.
The report says 2020 marked a historic turning point, when the era of global convergence of revenue sources gave way to divergence. double the losses of the richest 20% of the source of income distribution. As a result, global inequality has risen for the first time in decades.
Strong fiscal policy measures have made a significant difference in reducing the impact of COVID-19 on poverty. In fact, the average poverty rate in emerging economies would have been 2. 4 compared to percentage problems compared to without a fiscal response. spending has been much more favorable for poverty alleviation in richer countries, which have sometimes been able to fully offset the impact of COVID-19 on poverty through fiscal policy and other emergency relief measures. Developing economies had fewer resources and therefore spent less and achieved less: middle-income economies offset only 50% of the effects on poverty, and low- and lower-middle-income economies slightly offset a quarter of the effects on poverty.
“Over the next decade, making an investment in better fitness and education will be very important for emerging economies, given the severe learning losses and fitness-related setbacks they have suffered during the pandemic,” said Indermit Gill, chief economist and senior vice president. for the World Bank. Development Economics”. At a time of record debt and exhausted budgetary resources, this will not be easy. Governments will want to focus their resources on strengthening human capital and maximizing growth.
The new report is the first to provide existing and old knowledge on the new global excessive poverty line, which has been adjusted upwards to $2. 15 consistent with the day to reflect the most recent purchasing force parity knowledge of 2017. Extreme poverty fell dramatically worldwide from 1990 to 2019, the newest year for which official data is available. But progress slowed after 2014, and policymakers now face a more challenging environment: excessive poverty is concentrated in the parts of the world where it will be most difficult to eradicate: sub-Saharan Africa, conflict-affected spaces, and rural spaces.
Sub-Saharan Africa now accounts for 60 percent of all other people living in extreme poverty, 38 nine million, more than any other region. The region’s poverty rate is around 35 percent, the highest in the world. By 2030, each and every country in the region would like to achieve a consistent capita GDP expansion of nine cents consistent with the year for the rest of this decade. This is an exceptionally important barrier for countries whose GDP consistent with expansion averaged 1. 2% in the decade prior to COVID-1nine.
According to the report, national policy reforms can reinvigorate progress in poverty reduction. Greater global cooperation will also be desired. When it comes to fiscal policy, governments want to act temporarily on 3 fronts:
Download Poverty and Shared Prosperity 2022
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