UN warns of growing global poverty

Shifting focus now to the global economy and global poverty is rising according to the United Nations. Nearly 1.2 billion people now live in acute poverty. This marks the first increase in the global poverty index since it was introduced in 2010. Here's a report on the scale of the crisis and why the world's most vulnerable populations are at risk. Take a look. The number of people living in acute poverty worldwide has risen for the first time since the United Nations began tracking the index in the year 2010 according to the UN Development Program and the Oxford Poverty and Human Development Initiative around 1.2 billion people are now affected an increase of 51.5 million from the previous year more than half of those living in acute poverty are children facing overlapping hardships such as inadequate housing limited access to education poor sanitation and the lack of clean water electricity and adequate cooking fuel however the UNDP says the increase in the total number of people affected also reflects population growth the latest report draws on new data from only 13 of the 108 developing countries covered by the index offering an incomplete picture of recent global trends the findings highlight the scale of deprivation even as some countries continue to make progress in reducing poverty rising energy and food prices are adding to the economic pressure on developing countries many of which have limited resources to protect households from higher costs global fuel prices have surged since late February disrupting oil and natural gas supplies governments have responded with subsidies to cushion the impact on consumers but repeated crises have weakened their ability to sustain that support countries have since the conflict started around the Strait of Hormuz countries have been quite successful at shielding their population for the increases in fuel prices but at the huge costs the UNDP estimates that around 130 million people could be pushed into poverty this year if increases in energy and food prices are fully passed on to households without subsidies south and east asia and sub-saharan africa are among the regions particularly exposed higher borrowing costs are making the situation more difficult the median developing country now spends around 9.5 percent of government revenue on interest payments the highest level in 25 years and more than three times the share in high income countries the issue is that countries have never had the time to recover. Since COVID, we're stumbling from one crisis into the other. And what countries need is some space and some time and access to financing. And that financing very often is private financing and is actually available because investing in renewable is today an economically sound investment. It's just that the sequence makes it really hard. I you have to repair your roof while at the same time your home is on fire the risk of further economic shocks is adding to concerns about the outlook for developing countries well the UNDP has warned that the expected El Niño climate phenomena could bring severe weather including floods and droughts with impacts forecast to peak in early 2027. we see that the impact of climate has an economic cost avoiding that cost as a business case also working more with insurance is is one way going forward meanwhile the International Monetary Fund has cautioned that the resilience of global economic growth is heavily dependent on investment in artificial intelligence countries that are not benefiting from the AI investment boom could continue to face weaker economic conditions so the implication of all of this is that you know the the divergences that we're seeing at the global economy are here to stay. And I think this is also important to keep in mind when we think about how difficult it's going to be for many of these economies to rebuild policy space and to be able to reduce debt and to also bring inflation down to targets. The UNDP's assessment also points to a widening gap in countries' capacity to withstand these shocks. There are, however, signs of progress. 33 countries have half the proportion of their populations living in multidimensional poverty over the past 15 years, including China and Vietnam. The central challenge now is whether vulnerable countries can secure the resources needed to protect their populations before the next crisis hits.