The World Bank announced on June 5 that it has raised the international poverty line to $3 per person daily.
The previous figure was $2.15 and was based on data on purchasing power parity (PPP) of countries for 2017.
As the World Bank explains, these PPPs convert different currencies into a common unit, taking into account the price difference between countries. Their update led to a revision of the assessment of the very concept of the “poverty line.”
The most up-to-date information was collected in 2021 and published in 2024. The organization noted that the change in the poverty line also takes into account recent improvements in measuring well-being in low-income countries. In particular, such states began to collect more accurate statistics on the cost of basic food, clothing, and housing.
The poverty line allows you to determine the number of people living in poverty. According to new estimates, in 2022, about 838 million people were in poverty, or 10.5% of the world’s population. Raising the limit to $3 and making other methodological changes raised this estimate by $125 million.
Moreover, some methodological changes, such as using updated data on India, excluded some people from the extremely poor.
As a result, the estimate of the number of poor people in South Asia was lowered by 45 million, and in other regions, it increased. Half of the “new” poor came from sub-Saharan Africa: the estimated number of people below the poverty line there increased by 111 million.
“The world is poorer than we thought, and less likely to be able to eradicate extreme poverty by 2030, as extreme poverty is increasingly concentrated in sub-Saharan Africa and unstable countries,” the World Bank economists write.