The Global Cost of Living Crises

 The worldwide cost-of-living crisis is pushing an additional 71 million people in the world’s poorest countries into extreme poverty, warned the a new report by the U.N. Development Programme (UNDP). 

The total number of people living in poverty, or are vulnerable to poverty, stands at over 5 billion, or just under 70% of the world’s population

Achim Steiner, UNDP administrator, said an analysis of 159 developing countries showed that the surge in key commodity prices this year was already hurting parts of Sub-Saharan Africa, the Balkans, Asia and elsewhere.

“This cost-of-living crisis is tipping millions of people into poverty and even starvation at breathtaking speed,” Steiner said. “With that, the threat of increased social unrest grows by the day.”

The UN, World Bank and International Monetary Fund have a number of ‘poverty lines’ – one for the poorest countries where people live on $1.90 or less a day. A $3.20-a-day line for lower-middle-income economies and a $5.50-a-day line in upper-middle-income countries.

“We project that the current cost-of-living crisis may have pushed over 51 million more people into extreme poverty at $1.90 a day, and an additional 20 million at $3.20 a day,” the report said, estimating it would push the total globally to just over 1.7 billion people.

In low-income countries, families spend 42% of their household incomes on food but as Western nations moved to sanction Russia, the price fuel and staple food items like wheat, sugar and cooking oil soared. Ukraine’s blocked ports and its inability to export grains to low-income countries further drove up prices, pushing tens of millions quickly into poverty.

The speed at which this many people experienced poverty outpaced the economic pain felt at the peak of the pandemic. The UNDP noted that 125 million people experienced poverty over about 18 months during the pandemic’s lockdowns and closures, compared with more than 71 million in just three months after Russia’s invasion of Ukraine in late February.

Some of the countries hardest hit by inflation include Haiti, Argentina, Egypt, Iraq, Turkey, the Philippines, Rwanda, Sudan, Kenya, Sri Lanka and Uzbekistan. In countries like Afghanistan, Ethiopia, Mali, Nigeria and Yemen, the impacts of inflation are even harder for those already at the lowest poverty line.

Another U.N. report released Wednesday said world hunger rose last year with 2.3 billion people facing moderate or severe difficulty obtaining enough to eat — and that was before the war in Ukraine.

Rising Inflation Pushes 71 Million People Worldwide Into Poverty| Countercurrents