Knowledge Note

"The COVID-19 pandemic and ensuing global economic crisis are on course to reverse years of gains in the reduction and alleviation of poverty, thus drastically undermining global efforts to meet the SDG deadline of eradicating extreme poverty by 2030."

This Policy Brief aims to inform policymakers of the potential impact of COVID-19 on poverty. It explores the implications of COVID-19 through various macroeconomic scenarios, ranging from the very optimistic to the pessimistic. The findings suggest that complete eradication of extreme poverty by 2030 looks highly unlikely even in the most optimistic scenario and that the global number of people living in extreme poverty could in fact continue to go up in the more pessimistic scenario. The final section summarizes the findings and discusses policy implications.

Policies to reduce inequality and promote a country’s social and macroeconomic resilience, such as the strengthening of labor standards and the expansion of the social protection systems and universal health coverage are needed now more than ever. As developing countries currently face the prospect of costly debt crises with far-reaching consequences, global action is urgently needed. The window to mitigate the disastrous long-term consequences of COVID-19 on poverty is closing rapidly. 

This document is a UN/DESA (United Nations/ Department of Economic and Social Affairs Economic Analysis) Policy brief #86, October 2020 edition.