The Covid-19 pandemic and Russia’s invasion of Ukraine have reversed three decades of progress in reducing poverty, according to the World Bank, which warned that the global goal of eradicating extreme poverty by 2030 is now out of reach.

About 70 million people fell into extreme poverty in 2020, the largest increase since monitoring began in 1990, the Washington-based lender said in a report Wednesday. At current economic trends, more than 570 million, or about 7% of the world’s population, will remain living below that threshold by the end of this decade.

“Of concern to our mission is the rise in extreme poverty and decline of shared prosperity brought by inflation, currency depreciations, and broader overlapping crises facing development,” said World Bank President David Malpass. “Adjustments of macroeconomic policies are needed to improve the allocation of global capital, foster currency stability, reduce inflation, and restart growth in median income.”

The report is the first to provide data on the World Bank’s new global extreme-poverty line, which is $2.15 a day and reflects the latest international prices and the increased value of the US dollar.

To combat poverty and inequality, the World Bank urges governments to act quickly on three fronts:

• Favor targeted cash transfers over broad subsidies
  • Half of all spending on energy subsidies in low- and middle-income economies goes to the richest 20% of the population who consume more energy, while more than 60% of cash transfers benefits the bottom 40% of earners, according to the report.
• Spend now for long-term growth
  • Prioritize public funds for high-return investments in education, research and development, and infrastructure projects.
• Raise domestic revenue without hurting the poor
  • Consider property and carbon taxes and broadening the base of personal and corporate income taxes, and provide cash transfers to offset any increases in sales and excise taxes to minimize pain to low earners.