Coronavirus Has Thrown Around 100 Million People Into Extreme Poverty, World Bank Estimates

The World Bank now estimates a total of between 703 million and 729 million people are in extreme poverty, and that the number could rise further in 2021.

Before the pandemic, the number of people in extreme poverty was estimated at 615 million for 2020.

“This is the worst setback that we’ve witnessed in a generation,” said Carolina Sánchez-Páramo, global director of the World Bank’s Poverty and Equity Global Practice.

Even during the global financial crisis of a decade ago, when most of the world was similarly mired in recession, the number of people in extreme poverty continued to decline because the major emerging markets of India and China continued to grow.

But the impacts of the coronavirus pandemic are proving more widespread and severe, and they are pulling new demographic groups into extreme poverty. Before the pandemic, those living in extreme poverty tended to be rural, undereducated, young and working in agriculture. But the pandemic is pushing poverty upon people in congested urban areas, with higher levels of education, and who work in industries such as informal services, construction and manufacturing.

“The new poor are more urban, better educated and less likely to work in agriculture than those living in extreme poverty before Covid-19,” the World Bank said in its report.

The surge in poverty is likely to dash the hopes of the Sustainable Development Goals, promoted by the United Nations, to eradicate extreme poverty by 2030. Before the pandemic, that goal had been viewed as aggressive, but perhaps achievable.

“The convergence of the Covid-19 pandemic with the pressures of conflict and climate change will put the goal of ending poverty by 2030 beyond reach without swift, significant and substantial policy action,” the World Bank said.

The institution’s estimates are more dire than those in a similar report from the Bill & Melinda Gates Foundation released last month, estimating the pandemic had driven 37 million people into extreme poverty.

Samuel Freije-Rodriguez, lead economist in the World Bank’s Poverty and Equity Global Practice, said the two estimates are based on different methodologies, and that the World Bank relies on its own detailed economic forecasts.

Both the Gates Foundation and the World Bank focus on the $1.90-a-day measure of extreme poverty. The figure is comparable, adjusted for inflation, to the $1-a-day threshold that became popular in the 1990s as the marker of extreme poverty. In 1990, more than 1.9 billion people lived below the extreme poverty threshold, a rate of 36%.

In 2020, that rate has risen as high as 9.4%, according to the World Bank, from a 7.9% estimate before the pandemic.

The past 30 years have been a period of almost uninterrupted improvement in living standards for many of the world’s poorest. In 1990, nearly 1 billion people in East Asia alone, primarily China, lived in extreme poverty as did another half billion people in South Asia, primarily India.

The rise of China’s and India’s economies lifted hundreds of millions of people out of poverty. Latin America has also seen the number of people in poverty fall by more than half.

Before the pandemic, the most severe setback had occurred in 1998, when the Asian financial crisis threw tens of millions of people, primarily in Asia, into extreme poverty. That setback proved brief, with the figures completely rebounding by 1999.

The majority of the world’s extreme poor live in sub-Saharan Africa, which has made less progress against extreme poverty than other regions of the world over the past 30 years. Before the pandemic, 440 million of the continent’s population was in extreme poverty, a rate of nearly 40%. That is projected to rise by as much as 480 million, or a rate of 42% this year, due to the effects of the pandemic.

Write to Josh Zumbrun at Josh.Zumbrun@wsj.com