Post-Pandemic Trends in Extreme Poverty around the World – World Bank Blogs

Global Poverty Trends and Sustainable Development Goals (SDGs) Report

Overview of Poverty Decline (2021-2024)

Between 2021 and 2024, three out of four countries are projected to experience a decline in poverty levels, indicating a broad recovery following setbacks during the pandemic. This positive trend aligns with the objectives of SDG 1: No Poverty, which aims to eradicate extreme poverty globally.

Significant reductions in poverty were observed in nearly all countries across the following regions:

• Europe and Central Asia (ECA)
• East Asia and Pacific (EAP)
• Latin America and the Caribbean (LAC)

These improvements are primarily driven by economic growth, with 81% of countries showing positive growth in 2024. Furthermore, from 2021 to 2024, 86% of countries maintained an average positive GDP growth rate, supporting sustained poverty reduction efforts.

Challenges in Low-Income and Fragile Regions

The situation remains mixed in low-income countries and regions including the Middle East, North Africa, Afghanistan and Pakistan (MENAAP), and Sub-Saharan Africa (SSA). Key statistics include:

1. Approximately 50% of low-income countries (11 out of 21) experienced rising poverty.
2. Half of the countries in MENAAP (4 out of 8) saw increases in poverty.
3. 40% of countries in SSA (18 out of 46) faced growing poverty rates.

Countries affected by Fragility, Conflict, and Violence (FCV) faced the most severe outcomes, with only about one-third (8 out of 23) showing improvements. These challenges highlight the need for targeted interventions to meet SDG 16: Peace, Justice and Strong Institutions and SDG 10: Reduced Inequalities.

Future Outlook: 2025 and Beyond

Projected Poverty Reduction

Looking ahead to 2025, 80% of countries are expected to witness further declines in poverty, representing the highest proportion of countries with falling poverty rates in the past decade. This optimistic forecast extends to vulnerable groups:

• 75% of low-income countries are projected to reduce poverty.
• 70% of FCV-affected countries are expected to see poverty declines.

This progress supports the global commitment to SDG 1 and contributes to SDG 8: Decent Work and Economic Growth by promoting inclusive economic development.

Economic Growth as a Driver of Poverty Reduction

The projected improvements in household welfare are attributed to the Macro Poverty Outlook (MPO) model, which forecasts that economic growth gains will be transferred to households. In 2025:

• 85% of countries are predicted to experience real GDP growth.
• This economic growth correlates closely with the 80% of countries expected to reduce poverty.

Focus on Countries with Highest Poverty Burdens

Among the ten countries with the highest numbers of people living in poverty, nine are projected to have positive GDP growth in 2025, with Mozambique as the exception. Despite these positive trends, the magnitude of poverty reduction remains limited in some low-income and FCV-affected countries, underscoring persistent challenges to achieving SDG 1.

Risks and Uncertainties

These projections are subject to uncertainties including:

• Economic shocks related to inflation, debt, and growth fluctuations
• Climate risks impacting vulnerable populations (SDG 13: Climate Action)
• Ongoing conflicts and instability

Unforeseen shocks can reverse progress, emphasizing the need for resilient and adaptive policies to accelerate poverty eradication efforts globally.

Resources for Further Information

For detailed country-specific data and analysis on poverty and inequality, the following World Bank resources are recommended:

• Poverty and Inequality Platform
• Poverty and Equity Briefs
• Macro Poverty Outlook (MPO)

1. Sustainable Development Goals (SDGs) Addressed or Connected

1. SDG 1: No Poverty
   • The article focuses extensively on poverty reduction trends and projections globally and regionally, directly linking to SDG 1.
2. SDG 8: Decent Work and Economic Growth
   • Economic growth and GDP growth rates are highlighted as key drivers for poverty reduction, connecting to SDG 8.
3. SDG 10: Reduced Inequalities
   • The article mentions disparities in poverty trends across regions and countries, implying relevance to reducing inequalities.
4. SDG 16: Peace, Justice and Strong Institutions
   • Fragility, conflict, and violence (FCV) countries are discussed as facing worse poverty outcomes, linking to SDG 16.

2. Specific Targets Under Those SDGs Identified

1. SDG 1: No Poverty
   • Target 1.1: Eradicate extreme poverty for all people everywhere, currently measured as people living on less than $1.25 a day.
   • Target 1.2: Reduce at least by half the proportion of men, women and children living in poverty in all its dimensions according to national definitions.
2. SDG 8: Decent Work and Economic Growth
   • Target 8.1: Sustain per capita economic growth in accordance with national circumstances, and in particular at least 7 percent GDP growth per annum in the least developed countries.
3. SDG 10: Reduced Inequalities
   • Target 10.1: Achieve and sustain income growth of the bottom 40% of the population at a rate higher than the national average.
4. SDG 16: Peace, Justice and Strong Institutions
   • Target 16.1: Significantly reduce all forms of violence and related death rates everywhere.
   • Target 16.6: Develop effective, accountable and transparent institutions at all levels.

3. Indicators Mentioned or Implied to Measure Progress

1. Poverty Rate
   • The article discusses the proportion of countries experiencing declines or increases in poverty, implying the use of poverty headcount ratio as an indicator.
2. GDP Growth Rate
   • Positive GDP growth rates for countries are repeatedly mentioned as a key metric, indicating the use of annual GDP growth rate as an indicator.
3. Household Welfare
   • The article refers to projected improvements in household welfare, implying indicators related to income or consumption per capita.
4. Regional and Country-Level Poverty Trends
   • Data on poverty trends by region and country, including fragile and conflict-affected states, suggest the use of disaggregated poverty indicators.

4. Table of SDGs, Targets, and Indicators

Source: blogs.worldbank.org