Global Economy Stabilizes, But Poverty Reduction Goals Face Major Setbacks
After years of continuous economic shocks, the global economy is finally showing signs of stabilization, with advanced economies avoiding a global recession in 2024. However, recovery remains uneven, with developing and low-income countries lagging far behind.
The harsh reality is that achieving the goal of ending extreme poverty by 2030 is now unattainable. The confluence of sluggish economic growth, lingering effects of the COVID-19 pandemic, mounting debt burdens, rising fragility, and intensifying climate shocks has stalled poverty reduction efforts worldwide.
Poverty Reduction Goals Deferred
As of 2024, approximately 700 million people globally live in extreme poverty, subsisting on less than $2.15 a day. Another 3.5 billion survive on less than $6.85 daily. At the current pace, eradicating extreme poverty could take decades, while addressing broader poverty may require over a century.
Multidimensional poverty—which includes deficits in health, education, and basic services—is alarmingly prevalent in low-income nations, particularly in Sub-Saharan Africa. The World Bank’s International Development Association (IDA) has launched a $23.7 billion replenishment campaign, expected to generate $100 billion in financing for development in 78 low-income countries through 2028.
Climate Change Impacts Worsen
Climate shocks now pose life-changing risks to 1.2 billion people, with nearly half of the population in IDA countries classified as highly vulnerable. The World Bank Group allocated a record $43 billion in climate financing this year, focusing on mitigation, resilience-building, and transitioning to low-carbon economies.
Gender Inequality Persists
Gender equality remains an unrealized ambition. Women in both high- and low-income countries continue to face barriers, including lower workforce participation and greater impacts from ongoing crises. The World Bank has outlined its 2024-2030 Gender Strategy to expand women’s access to education, job opportunities, banking, and essential services.
Soaring Debt Burdens Strain Developing Nations
The total external debt of low- and middle-income countries reached $8.8 trillion in 2023, with interest payments soaring to $406 billion. The debt crisis has reduced funds available for critical investments in health, education, and climate resilience. The World Bank has increased its support by injecting $51 billion more into developing economies than it collected in debt-service payments since 2022.
Bold Initiatives for 2024 and Beyond
In 2024, the World Bank Group announced new initiatives, including:
• M300: Delivering electricity to 300 million Africans by 2030 in partnership with the African Development Bank.
• Social Protection: Scaling up programs for 500 million people.
• Healthcare: Supporting affordable, quality health services for 1.5 billion people by 2030.
• Agribusiness Ecosystems: Launching sustainable agricultural initiatives.
These initiatives, paired with innovative financial instruments and a new Corporate Scorecard to drive efficiency and impact, are designed to address both current challenges and long-term development goals.
As the global community navigates complex challenges, the World Bank Group remains committed to helping countries overcome poverty, inequality, and climate risks while striving for inclusive, sustainable growth.