COVID-19 could force 100 million people into extreme poverty — World Bank

The World Bank expects the global economy expected to shrink by 5.2 per cent  in 2020 due to COVID-19.

The global economy will contract by 5.2 per cent due to COVID-19.

“The swift and massive shock of the coronavirus pandemic and shutdown measures to contain it have plunged the global economy into a severe contraction,” the Bank said in its June newsletter.

Using the newly launched growth forecasts of June from the Global Economic Prospects, the Bank also provided updated global estimates of the impact of coronavirus forecast 71 to 100 million people will be pushed into extreme poverty.

Sub-Saharan Africa is expected to be hit hardest. The new GEP forecasts give a particularly sobering picture for India, which is home to many of the world’s poor.

A farmer at Connector Road, Chaguanas, organises his vegetables for sale after harvesting his crops earlier in May.

The World Bank said of the 176 million people expected to be pushed into poverty at the $3.20 poverty line under the baseline scenario, two-thirds are in South Asia.

Even before the global COVID-19 pandemic broke out, food insecurity was a serious concern throughout sub-Saharan Africa.

The Bank said countries must take action now to build more resilient and productive food systems in the region to support food security during this pandemic and beyond.

The World Bank said food insecurity was a severe issue in sub-Saharan Africa even before the coronavirus pandemic.

World Bank’s calculations suggest that around 20 million jobs will be destroyed in the Latin America and Caribbean region this year. The current crisis, although deep and painful, offers the unique opportunity to reach broad social and political agreements to move toward these goals.

Meanwhile, the global agency also noted that recovery from COVID-19 will be an opportunity for countries to build resilience, improve inclusion and ensure economic growth.

It also states in its blogs that alternative lenders using fintech—such as crowdfunding platforms and marketplace lenders— have been an increasingly important source of financing for small and medium businesses.