Covid-19 Pandemic is Making the World Poorer

A major report stated that due to the pandemic, in the last year, the global middle class shrank by 90 million people.

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Covid-19 Pandemic is Making the World Poorer THE POLICY TIMES

The financial woes brought by the last year’s global pandemic have pushed about 32 million Indians out of the middle class, while the job losses pushed millions into poverty. This is the first time in decades that in the last year, the global middle class shrank to a huge scale.

Data of The Pew on Middle Class

On Thursday, the researchers of the Pew Centre found that the ranks of the global middle class fell by 90 million people to almost 2.5 billion last year. Between 2011 and 2019, nearly about 57 million people had joined the middle-income group. The World Bank in January 2020 forecast the same level of economic growth for India and China, at 5.8% and 5.9%. But then, the World Bank revised its forecast in January this year to a contraction of 9.6% for India and 2% for China. The Pew Centre estimated that the number of poor people who had an income of $2 or less each day, has gone up by 75 million. The reason is the recession brought by the virus which has clawed back years of progress.

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Is There a Reverse in The Global Trend?

In 2011, when Pew last calculated the size of the global middle class then it made up 13% of the global population. By 2019, it had grown to nearly 18%. The researchers at the World Bank surveyed 47,000 households in 34 developing countries and it was found that 36% of the households saw job-losses and two-thirds saw a drop in the income.

TPT Policy Advocacy & Recommendations

  • The global pandemic has created a huge economic crisis by shuttering businesses and cutting jobs around the world. The Government of every country must bring new schemes to fix the unemployment which will in return fix the economy.
  • The economic rebound depends on the policy response of the government as well as on the economic shifts. In the wake of the lockdown, unemployment has assumed tsunami-like dimensions which can only be revived if the Government focuses on creating jobs.
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Covid-19 Pandemic is Making the World Poorer
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A major report stated that due to the pandemic, in the last year, the global middle class shrank by 90 million people.
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THE POLICY TIMES
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