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POVERTY AND SHARED PROSPERITY 2022 Fiscal Policy for an Inclusive Recovery By the World Bank
The COVID-19 pandemic has triggered the most pronounced setback in the fight against global poverty since World War II. Hopes for a recovery for many low- and middle-income countries have yet to be realized. High indebtedness and rising food and energy prices—fueled in part by the war in Ukraine and climate shocks among the world’s biggest food producers—have compounded the challenges. 2020 marked a turning point—an era of global convergence gave way to global divergence as the world’s poorest people were hardest hit. The income losses experienced by the poorest were more than double those faced by the richest, widening the income gap. The poorest then began to recover from the pandemic at a slower pace than the richest. The shock and patchy recovery underscore the pressing need to revamp tax and spending policies to put the world back on course to reducing poverty and inequality. The triple challenges of the past two years—COVID-19, climate, and conflict—have delayed progress toward the goal of eliminating extreme poverty. A range of policies and actions is critical to a resilient recovery from the pandemic. Fiscal policies can help promote long-term growth and stability, but achieving the right balance is tricky. This report provides new data on the stark reversal of progress in the fight against global poverty. It explores how to optimize fiscal policy and identifies policies that can help correct course. The risk of future crises is not going away, so this report also addresses how to better protect progress against future shocks and what types of fiscal policies can facilitate a much-needed period of higher growth that boosts the incomes of poor people.
WORLD BANK PUBLICATIONS AND ePRODUCTS
POVERTY AND SHARED PROSPERITY October 2022. 250 pages. Stock no. C211893 (ISBN: 978-1-4648-1893-6). US$49.50
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