World Bank President David Malpass said the new Poverty and Shared Prosperity report showed the grim outlook facing tens of millions of people, and called for major policy changes to boost growth and help jumpstart efforts to eradicate poverty.
“Progress in reducing extreme poverty has essentially halted in tandem with subdued global economic growth,” he said in a statement, blaming inflation, currency depreciations and broader overlapping crises for the rise in extreme poverty.
To change course, the World Bank said countries should boost cooperation, avoid broad subsidies, focus on long-term growth and adopt measures such as property taxes and carbon taxes that could help raise revenue without hurting the poorest.
It said poverty reduction had already slowed in the five years leading up to the pandemic, and the poorest people clearly bore its steepest costs. The poorest 40 per cent of people saw average income losses of 4 per cent during the pandemic, twice the losses experienced by the wealthiest 20 per cent, it said.
Government spending and emergency support helped avert even bigger increases in poverty rates, the report showed, but the economic recovery had been uneven, with developing economies with fewer resources spending less and achieving less.
Extreme poverty was now concentrated in sub-Saharan Africa, which has a poverty rate of about 35 per cent and accounts for 60 per cent of all people in extreme poverty, the report said.