- The World Bank has revised its predictions for how the COVID-19 pandemic will affect global poverty.
- The spread of coronavirus to the global south has lead to increased lockdowns with greater economic costs.
- The worst-case scenario will push more than 100 million people into extreme poverty.
In April the World Bank estimated that COVID-19 is pushing between 40 and 60 million into extreme poverty. Since then, the epicenter of the pandemic has shifted from Europe and North America to the global south. This has increased the death toll in low- and middle-income countries, induced longer shutdowns, and increased the economic costs of the pandemic. As a result, our estimates of the impact of the virus on global poverty have shifted as well, the report added.
Projecting what happens in 2021 and beyond comes with even more uncertainty. The GEP forecasts expect that global economic output will increase by about 4% in 2021, yet the world bank poverty forecasts suggest that the number of people living in extreme poverty will be broadly unchanged between 2020 and 2021. How can that be? A lot has to do with the growth rates of the countries with the most poor. Nigeria, India, and the Democratic Republic of Congo — three countries which the report project are home to more than a third of the world’s poor—are predicted to have per capita growth rates in real GDP of –0.8%, 2.1% and 0.3%, respectively. With population growth rates of 2.6%, 1.0% and 3.1% this is hardly enough for sustainable decreases in the poverty headcount.
As these revised estimates make clear, poverty projections carry a lot of uncertainty and are likely to develop further as more information becomes available and as the pandemic develops.
Extracted from a World Bank Article from it’s website