The COVID-19 pandemic could push as many as 124 million people around the world into extreme poverty, up from about 115 million earlier predicted, a new report indicates.
While the World Bank in October 2020 predicted that the pandemic could push between 88 and 115 million people around the globe into extreme poverty, the latest Global Economic Prospects report puts the number at between 119 and 124 million.
This is due to falling income levels, widespread unemployment and growing fiscal deficits caused by the pandemic.
The report further indicates that the COVID-19-induced poor is set to rise to between 143 and 163 million in 2021.
While the estimates for 2021 are preliminary, the report notes that this shows that for millions of people around the globe, this crisis will not be short-lived.
The estimates rely on extrapolations of household surveys that pre-date 2020.
The number of COVID-19-induced new poor is calculated as the difference between poverty projected with the pandemic and poverty projected without the pandemic.
To predict poverty in the former, GEP used its growth forecasts from January 2021, and for the pandemic-free world, GEP growth forecasts made in January 2020 were used.
“The estimated increase in global poverty in 2020 is truly unprecedented. This is the first time in 20 years that poverty is likely to significantly increase,” the report reads.
A Financial Sector Deepening Uganda 2020 report also noted last year that nearly half the adults in Uganda could fall into poverty due unemployment resulting from the COVID-19 containment measures.
The report indicated that at least 57% of adult Ugandans would not be able to sustain their current lifestyle after just one day of lockdown, while eight out of 10 people would not be able to sustain their lifestyle after 15 days of shutdown.
The World Bank said to reverse this serious setback, countries would need to prepare for a different economy post-COVID, by allowing capital, labor, skills and innovation to move into new businesses and sectors.