The world goal of ending extreme poverty by the year 2030 is incredibly unlikely to be achieved unless there are historic rates of economic growth over the remainder of this decade, according to a study by the World Bank. Its study has found that COVID-19 was the biggest setback to the efforts to end global poverty since the 1990s, plus the war in Ukraine has threatened to make poverty worse.

The World Bank’s study, entitled “Poverty and Shared Prosperity Report” gives a detailed overview looking at the global landscape of poverty in the aftermath of crippling damage to the global economy over the last few years. The report has estimated that the global pandemic has pushed about 70 million people into extreme poverty in 2020, which is the largest one-year increase since global poverty began being monitored back in 1990. The estimated results show that 719 million people lived on less than $2.15 a day by the end of 2020

David Malpass, the President of the World Bank Group said, “ Progress in reducing extreme poverty has essentially halted in tandem with subdued global economic growth.” Mr. Malpass continues by saying, “ of concern to our mission is the rise in extreme poverty and decline of shared prosperity brought by inflation, current depreciations, and broader overlapping crises facing development. It means a grim outlook for billions of people globally.” 

Better finance measures made notable differences in reducing COVID-19’s impact on poverty. If there wasn’t a fiscal response, then the average poverty rate in developing countries could’ve been 2.5% higher. In wealthier countries, government spending was much more beneficial in lowering poverty. That spending managed to offset, fully, COVID’s impact on poverty. 

The World Bank’s Chief Economist and Senior Vice President for Developing Economics, Indermit Gill, said, “Over the next decade, investing in better health and education will be crucial for developing economies, given the severe learning losses and health-related setbacks they suffered during the pandemic.” Mr. Gill continued by saying, “ In a time of record debt and depleted fiscal resources, this will not be easy. Governments will need to concentrate their resources on building human capital and maximizing growth.”

Extreme poverty fell majorly across the world from 1990 to 2019, but progress slowed down after 2014 and policymakers now have to confront an even tougher environment. In Sub-Saharan Africa where there is major conflict and in rural areas, extreme poverty will be the hardest to eradicate.

Sub-Saharan Africa is now accountable for more than 60% of people in poverty, which is approximately 389 million, more than any other region in the world. To achieve the 2030 poverty goals, every country in the Sub-Saharan region would need to have a per-capita GDP growth rate of 9% every year for the rest of the decade.