Poverty and Shared Prosperity 2022: Correcting Course

Abstract

The COVID-19 pandemic has significantly set back global poverty reduction efforts, likely causing the largest setback since World War II. Many low- and middle-income countries have yet to recover fully, hampered by high indebtedness and rising food and energy prices. This has led to a divergence in global incomes, with the poorest being disproportionately affected and the richest recovering quickly, resulting in the first increase in global inequality in decades. The report “Poverty and Shared Prosperity 2022: Correcting Course” analyzes the pandemic’s impact on poverty and outlines how governments can optimize fiscal policy for recovery. The report highlights three key priorities: reorienting protective spending towards direct transfer support systems, prioritizing growth-supporting fiscal spending, and mobilizing revenue through progressive taxation and efficient tax collection to minimize income reductions for the poor. This report provides crucial insights for informed advocacy on ending extreme poverty and improving the lives of the world’s poorest.