World Bank report warns stalled poverty reduction needs stronger job creation

Traders Union
All News
Financial Institutions
World Bank poverty warning

Highlights

World Bank's Poverty, Prosperity, and Planet Report 2026 warns that reducing global extreme poverty to 3% by 2050 requires 4% annual per capita growth, double the past 25-year rate.
More than half of the world's poorest people remain concentrated in nine economies, with 87% of extreme poverty projected in Sub-Saharan Africa or fragile and conflict-affected settings by 2030.
Raising employment rates in poor households to 75% could cut global extreme poverty by one-fifth, while matching poor workers' education to others would increase earnings by 40% and nearly halve extreme poverty.

Report findings on jobs and poverty

As reported by World Bank, citing the World Bank Group, its Poverty, Prosperity, and Planet Report 2026 says progress in reducing extreme poverty has largely stopped since the pandemic and that more and better jobs are central to reversing the trend.

The report says bringing extreme poverty down to 3% by 2050 would require per capita economic growth of about 4% a year, roughly double the pace achieved over the past 25 years. Pablo Saavedra, World Bank Group Vice President for Prosperity, says slow growth in the poorest countries has held back job creation and limited opportunities for millions of people.

Extreme poverty also remains heavily concentrated, with more than half of the world's poorest people living in nine economies. By 2030, an estimated 87% of people in extreme poverty are projected to live in Sub-Saharan Africa or in fragile and conflict-affected settings.

Employment and earnings gaps shape the outlook

Nearly 3.7 billion people, or almost half the global population, still live on less than $8.30 a day, a level the World Bank says has remained stagnant since 1990. The institution uses the $3.00 a day line for extreme poverty in low-income countries and the $8.30 line as the benchmark for upper-middle-income countries.

The report identifies two linked priorities: closing employment gaps and closing earnings gaps. It says raising employment rates in poor households to 75% among working-age adults, including by narrowing gender gaps in work, could reduce global extreme poverty by roughly one-fifth.

It also says improving education levels among poor workers to match those above the extreme poverty line would lift predicted earnings by around 40% and cut extreme poverty nearly in half. Shifting workers from low-return activities such as smallholder farming into wage jobs or out of agriculture would reduce poverty by about one-fifth, while supporting farmers, small businesses and women's workforce participation would help build wider economic security and a growing middle class.

In our earlier article on the IMF’s updated outlook for Sub-Saharan Africa, we noted that the region’s 2026 growth forecast was revised higher, but the inflation trajectory was also seen worsening. We highlighted how tighter monetary conditions, rising debt-service burdens, aid declines, and climate shocks such as El Niño could strain fragile buffers—factors that ultimately shape the environment for job creation and poverty reduction discussed in today’s report.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.