After several years of facing multiple, continuous shocks, the global economy is finally showing signs of stabilizing. Despite the grimmest predictions, the world managed to avoid a global recession this year.
However, while advanced economies have largely recovered, developing countries have yet to catch up. Low-income countries risk being left even further behind as the gap between developed and developing nations widens.
Currently, about 700 million people, or 8.5% of the global population, live in extreme poverty on less than $2.15 a day. Around 3.5 billion people subsist on less than $6.85 a day, a poverty line more relevant for middle-income countries which are home to three-quarters of the world’s population. The challenge of eradicating extreme poverty is daunting, with projections indicating it could take decades to achieve and more than a century to eliminate poverty as it is currently defined for nearly half of the world’s people.
Earlier this month, the global community reaffirmed their commitment to the International Development Association (IDA), which offers concessional lending to 78 low-income countries. The 21st replenishment of IDA raised $23.7 billion to boost development for these countries from 2025-2028. Leveraging this unique model, IDA will generate $100 billion in affordable financing to help countries spur job growth, deliver better quality healthcare, improve education, expand electricity access, enhance food security and nutrition, and much more.
The renewed commitment to IDA represents a critical step forward in addressing the multifaceted challenges that low-income countries face. However, without drastic and sustained efforts, the eradication of extreme poverty remains a distant goal.
The World Bank’s recent report underscores the urgent need for continued global support and action to bridge the gap between the world’s wealthiest and its most vulnerable populations.