COVID-19 Crisis Threatens to Push 150 Million People Into Extreme Poverty by 2021

Global extreme poverty is projected to increase in 2020 for the first time in more than two decades, as the COVID-19 pandemic intensifies existing challenges posed by conflict and climate change, according to the World Bank.

The pandemic is expected to force an additional 88 to 115 million people into extreme poverty this year, with the number potentially rising to as many as 150 million by 2021 depending on how severe the economic downturn becomes. Extreme poverty—defined as living on less than $1.90 per day—is estimated to affect between 9.1% and 9.4% of the global population in 2020. This reverses previous gains, bringing the rate close to the 9.2% recorded in 2017. Had the pandemic not occurred, global poverty was projected to fall to 7.9% in 2020.

“The pandemic and global recession could push more than 1.4% of the world’s population into extreme poverty,” stated World Bank Group President David Malpass. He emphasized that countries must prepare for a transformed post-pandemic economy by enabling capital, labor, skills, and innovation to transition into new sectors. The World Bank Group—through IBRD, IDA, IFC, and MIGA—plans to support developing countries in restoring growth and addressing the health, social, and economic effects of COVID-19 as part of an inclusive and sustainable recovery.

The report indicates that most of the newly impoverished will be in middle-income countries, which are expected to account for roughly 82% of the total. Many of these countries already face high poverty rates.

The combined pressures of the pandemic, conflict, and climate change threaten to derail the global goal of ending extreme poverty by 2030. Without strong, coordinated policy responses, the global poverty rate could still stand at around 7% by that year.

Another key shift is the increasing vulnerability of urban residents, who are now becoming more prone to falling into extreme poverty, a condition historically associated with rural populations.

Even before the pandemic, poverty reduction had begun to slow. Between 2015 and 2017, 52 million people escaped extreme poverty globally, but the rate of reduction had declined to less than 0.5 percentage points per year, compared to roughly 1 percentage point annually between 1990 and 2015.

Beyond the $1.90 threshold, the World Bank also tracks poverty at $3.20 and $5.50 per day—reflecting lower-middle-income and upper-middle-income country standards. While under 10% of the global population lives below $1.90 per day, nearly 25% lives under the $3.20 line, and over 40%—approximately 3.3 billion people—live on less than $5.50 per day.

The pandemic has also undermined shared prosperity, defined as income growth among the bottom 40% of a population. Average global shared prosperity is expected to stagnate or contract from 2019 to 2021, as weak economic growth disproportionately affects low-income groups. This downward shift risks increasing inequality, reducing social mobility, and weakening resilience to future shocks.

Previously, between 2012 and 2017, shared prosperity rose in 74 of 91 countries with available data, and in 53 of those, income growth among the poorest 40% exceeded the national average. During that period, the average income growth rate for the bottom 40% was 2.3%. Without targeted policy interventions, COVID-19 may reverse these inclusive growth trends.

The World Bank urges coordinated global efforts to prevent hard-earned poverty reduction gains from being lost and stresses that responses must address the overlapping challenges of COVID-19, conflict, and climate change.

To support developing countries, the World Bank Group has launched large-scale initiatives, including up to $160 billion in financial support over 15 months to help over 100 countries protect vulnerable populations, support businesses, and stimulate recovery. This includes $50 billion in new IDA funding through grants and highly concessional loans, alongside health interventions and critical supply chain support.