Economic Shock Could Throw 900 Million People Into Poverty, IMF Study Warns
Posted by Ram Kumar Shrestha on April 6, 2013
Hundreds of millions of people worldwide are on the brink of poverty.
A recent study by the International Monetary Fund warns that as many as 900 million people could fall back into poverty in the event of an economic shock like the Great Recession. That figure is three times the size of the U.S. population.
According to the World Bank, 1.2 billion people are currently living on less than $1.25 a day.
While the report acknowledges that progress has been to made to reduce global poverty and strengthen the world economy following the financial crisis, the world is still in a vulnerable situation.
Global unemployment, for example, is the highest it’s been in two decades with 40 percent of the world’s population out of work, according to the report.
And things could get much worse in the event of a macroeconomic shock, of which the Europe and U.S. are dangerously close. The recent bailout of Cyprus threw the eurozone into chaos, igniting fears that the situation could lead to the next financial crisis.
Here in the U.S., a series of automatic spending cuts know as the sequester could cost the economy hundreds of thousands of jobs. The cuts have already threatened thestability of safety nets designed to aid the nation’s poorest..
The U.S. continues to fail to sustain a robust job market, adding only 88,000 jobs in March.
(Hat tip: Business Standard)