Up to 115 million people could be pushed into extreme poverty this year as a result of the economic fallout of the Covid-19 pandemic and the lockdowns implemented in an attempt to manage the crisis, the World Bank has warned.
Extreme poverty in this case is defined as people living on less US$1.90 a day. The World Bank said that most of the people likely to be affected would be those living in middle-income countries in South Asia and sub-Saharan Africa. It also warned that most of those who risked falling into poverty would be fairly well-educated people living in urban areas.
Before the Covid-19 pandemic and its resulting economic destruction, it had been expected that about 7.5% of the world’s population would be living in extreme poverty next year. However, this proportion is now expected to grow to almost 10% in 2021.
The Financial Times quoted the World Bank’s director of the poverty and equity division, Carolina Sánchez-Páramo, as saying: ‘We are likely to see people who previously escaped poverty falling back into it, as well as people who have never been poor falling into poverty for the first time.’
She also said that the pandemic had initially been an urban phenomenon and people living and working in built-up areas had been worst affected by the various lockdowns implemented around the world.
The global economy is expected to shrink by between five and eight percent (on a per capita basis) this year, the World Bank said. Poverty levels and living standards would also regress to 2017 levels, it said.