Inflation, Covid plunged millions of Asians into extreme poverty
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Inflation and COVID hit Asia quite hard as tens of millions of people were plunged into extreme poverty in the wake of the pandemic.
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A woman walks past monitors showing Japan's Nikkei 225 index at a securities firm in Tokyo, July 31, 2023. (AP)
The Asian Development Bank (ADB) released a report on Thursday saying soaring food and fuel prices and the Covid pandemic pushed nearly 70 million more people in developing Asia into extreme poverty last year.
The report, titled "The State of Asian Development 2023", defines extreme poverty as living on less than $2.15 a day based on inflation-adjusted 2017 prices.
The ADB said that an estimated 155.2 million people or 3.9% of the region's population were living in extreme poverty in 2022. This is 67.8 million more than would have been the case without the pandemic and higher living costs.
Developing Asia refers to the multilateral lender's 46 emerging member economies, stretching from Kazakhstan in Central Asia to the Cook Islands in the Pacific.
The report found that poor people have been hurt the most by higher inflation as they are less able to pay higher prices for necessities. This has left many unable to save money, pay for healthcare, or invest in education.
The ADB estimated that the pandemic pushed 75-80 million more people into extreme poverty in 2020, compared to its pre-pandemic projections.
The report also found that developing Asian economies should continue to make progress against poverty, but an estimated 1.26 billion people, or about 30% of the region's projected population by 2030, will still be considered "economically vulnerable."
The term refers to a person living on $3.65 to $6.85 a day based on 2017 prices.
China records lowest inflation globally
The ADB said the region needs to focus on policies that will help poor people cope with higher inflation and improve their access to essential services. These policies include increasing social safety nets, investing in education and healthcare, and promoting economic growth that is inclusive and sustainable.
The report also called for greater international cooperation to address the challenges of poverty and inequality in developing Asia.
Despite the region reeling from hyperinflation, China recorded the lowest inflation rate worldwide as of March at 0.7%, and Russia ranked 102nd place at 3.5% despite the historic anti-Moscow sanctions imposed by the West in the past year.
European countries such as Spain (3.3), Switzerland (2.9), and Liechtenstein (2.9) were not far behind Russia, while Hungary and Moldova recorded 25.2 and 22% respectively.
The highest inflation levels were in Lebanon at 264%, Argentina at 104.3%, Zimbabwe at 87.6%, Suriname at 59.4%, and Turkey at 50.5%.
For the first time in years, Pakistan made its way to the top ten countries with a 35.4% inflation rate.
Despite declines in headline rates of inflation in the first few months of the year, the majority of chief economists at the World Economic Forum (WEF) anticipate runaway prices to continue to hurt Europe and the United States throughout 2023.
The International Monetary Fund has since last year warned about stagflation in Asia in light of the Ukraine war and the rise in commodity costs throughout the continent.
Inflation in Asia in April 2022 also started to increase as China's economic slowdown added to pressure on growth in the region.
The IMF's April forecast showed Asia's economy will expand 4.9% this year, down from the 5.4% of the previous projection made in January, while inflation in the continent is expected to reach 3.4% in 2022, 1% higher than forecast.
