As global poverty remains a pressing issue, the World Bank’s 2024 report underscores the need for urgent action to tackle multidimensional poverty and economic instability.
The World Bank has issued a stark warning in its 2024 Year in Review report, revealing that 700 million people—approximately 8.5% of the global population—are currently living in extreme poverty. This is defined as earning less than $2.15 a day, a figure that underscores the dire economic conditions faced by millions worldwide.
Alongside this, the report highlights a broader issue: nearly 3.5 billion people, or more than 40% of the global population, survive on less than $6.85 a day. This is particularly common in middle-income countries, which make up the majority of the world’s population. The report stresses that without substantial global intervention, eradicating extreme poverty could take decades, and lifting many people above the $6.85 threshold could take more than a century.
“Poverty is not only about income; it is about access to essential services like education, healthcare, and safe drinking water,” the World Bank noted in its findings.
The Growing Issue of Multidimensional Poverty
As of 2024, multidimensional poverty affects a significant portion of the global population. Over one-third of individuals in countries eligible for International Development Association (IDA) support, as well as more than half of those in Sub-Saharan Africa, are facing multiple deprivations at once. This multidimensional poverty reflects a complex web of challenges, including lack of access to education, healthcare, electricity, and sanitation, beyond just income-related issues.
The World Bank report also sheds light on the severe debt burdens confronting the poorest economies, a challenge exacerbated by the economic fallout from the COVID-19 pandemic. As global interest rates rise, developing nations are facing increasingly difficult recovery prospects.
By the close of 2023, low- and middle-income countries had amassed a record $8.8 trillion in external debt, a staggering 8% increase since 2020. At the same time, the interest payments on this debt skyrocketed by nearly 30%, totaling $406 billion. This leaves governments with constrained budgets, making it harder to invest in critical sectors like healthcare and education.
In response to the rising debt and the continuing challenges of poverty, the World Bank has focused on improving debt sustainability and supporting vulnerable economies. Since 2022, the organization has invested an additional $51 billion in countries eligible for IDA assistance, a figure that surpasses the total amount spent on debt-service payments.
Despite these efforts, global growth projections remain subdued, with the World Bank forecasting a global growth rate of just 2.6% for 2024. Developing economies are expected to grow even more slowly, at a rate of 4%. These figures point to a sluggish recovery, far below the pre-pandemic global growth average of 3.1%.
Although global commodity prices are expected to fall by 10% between 2024 and 2026, food inflation remains a major concern, especially in developing countries. Food prices in these nations continue to rise at double the rate seen in advanced economies, further complicating efforts to reduce poverty.
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