Amid COVID-19, extreme poverty could increase to 100 million: World Bank

On August 19, the World Bank Chief David Malpass said that the coronavirus pandemic may have driven as many as 100 million people back into extreme poverty. Reports suggest that previously he had estimated that 60 million people would fall into extreme poverty due to COVID-19. However, now the number has changed. He added that the number would go higher if the situation worsens. 

Read: Malaysian Economy Shrinks 17% In Worst Contraction On Record

Coronavirus takes a toll on the world economy 

According to Malpass, it is important for creditors to reduce the amount of debt held by poor countries. He said that more and more countries would be compelled to restructure their debt. Malpass said that the vulnerabilities due to debt are extremely high and it is important for new investors to come in. Reports suggest that various advanced economies have considered the measure of suspending debts from the poor nations by the end of this year. There is also a chance that more and more countries will be added who will follow a similar policy. However, according to Malpass, this is not sufficient. He said that the amount of debt reduction will differ from country to country but the policy, according to him, “makes a lot of sense”. 

Read: Thailand's Economy Shrinks Most In More Than 20 Years Amid COVID-19 Pandemic

According to data by Thai authorities, Thailand's economy suffered its worst decline since the Asian financial crisis more than two decades ago. One of the main reasons cited behind this contraction is the shattered tourism sector because of the coronavirus pandemic. As per the Office of National Economic and Social Development Council (NESDC), the economy shrank 12.2 per cent in the second quarter because of the pandemic spurred lockdown, which brought the economy to a staggering halt. In the month of April-June, Japan also recorded the worst contraction of all times as the economy shrank by 27.8 per cent at an annual rate, as per government data released on August 17. The economy of Japan is hard hit by the coronavirus pandemic with declining trade and consumption cycle. Reports suggest that the World Bank will be distributing $160 billion in funding to 100 countries by June 2021. Also, about $21 billion had been released through the end of June. Even after these measures, the poverty continues to rise.

Read: Japan’s Economy Shrinks At Annual Rate Of 27.8%, Worst Contraction On Record

Also Read: Dutch Economy Shrinks By 'unprecedented' 8.5% As Virus Hits

(Image Credits: Unsplash)