COVID-19 marked the end of a phase of global progress in poverty reduction. During the three decades that preceded its arrival, more than 1 billion people escaped extreme poverty. The incomes of the poorest nations gained ground.
By 2015, the global extreme-poverty rate had been cut by more than half. Since then, poverty reduction has slowed in tandem with subdued global economic growth. The economic upheavals brought on by COVID-19 and later the war in Ukraine produced an outright reversal in progress.
It became clear that the global goal of ending extreme poverty by 2030 would not be achieved.
Given current trends, 574 million people—nearly 7 percent of the world’s population—will still be living on less than US$2.15 a day in 2030, with most in Africa.
In 2020 alone, the number of people living below the extreme poverty line rose by over 70 million. That is the largest one-year increase since global poverty monitoring began in 1990. Looking at poverty more broadly, nearly half the world—over 3 billion people—lives on less than US$6.85 per day, which is the average of the national poverty lines of upper-middleincome countries. Using that measure, poverty persists well beyond Africa. The prevalence and persistence of poverty darken the outlook for billions of people living around the world.
The data confirm that the income losses of the poorest 40 percent of world’s population were twice as high as those of the richest 20 percent. Global median income declined by 4 percent in 2020—the first decline since our measurements of median income began in 1990. This decline represents a major setback for the goal of shared prosperity. The poorest also suffered disproportionate setbacks in education and health, with massive learning losses and shortened lifespans. These setbacks, if left unaddressed by policy action, will have lasting consequences for people’s lifetime income prospects and for development more broadly.
This latest Poverty and Shared Prosperity report offers the first comprehensive look at the global landscape of poverty in the aftermath of COVID-19 and the war in Ukraine. It outlines the limits of current fiscal policies for poverty reduction in low- and lower-middle-income economies, and points to the importance of reviving economic growth. It also shows the potential of fiscalpolicy reforms to help reduce poverty and support broad-based growth and development.
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