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The Number of People Living in Extreme Poverty Declined in 2019

More than 15 million people escaped extreme poverty across the world this year. The number of those living on less than $1.90 a day dropped from 604,790,159 to 589,425,192, according to the World Poverty Clock, a project of the World Data Lab.

This drop shows global progress toward the U.N.’s first Sustainable Development Goal to reduce the number of people living in extreme poverty. Efforts to empower those living in such vulnerable conditions include social safety net and protection programs in the form of unemployment, disability, and maternity cash benefits, along with social protection programs for children. 

Protection against natural disasters can also be a significant help to vulnerable regions and their economies. “As of 31 March 2019, 67 countries had reported progress in such alignment [with the Sendai Framework for Disaster Risk Reduction], and 24 countries reported that their respective local governments had developed local strategies consistent with national strategies and plans.” according to the U.N.

China’s COVID Shutdowns Disrupt Supply Chains

Source: Bloomberg

Global supply chains are experiencing disruptions for the second year in a row, due to a new wave of COVID-19 sweeping through China, reports Bloomberg. China’s zero-COVID policy restrictions have caused shipping, air freight, and trucking delays, setting back supply chains already reeling from the pandemic and Russia’s invasion of Ukraine.

Experts estimate that the ripple effects from the lockdowns and bottlenecks will extend throughout the year. Global trade started to rebound last year after its slump in 2020, but the conflict in Ukraine and now backlogs in China will lower trade volume and raise prices. China accounts for 12% of global trade.

Currently, it takes 111 days for cargo for goods to travel from Asia to the U.S., more than double the time it took in 2019. It takes even longer, 118 days, for goods to reach Europe from Asia, according to freight-forwarding company Flexport Inc.

In response, companies are considering shifting their supply chains out of Asia—79% of CEOs are planning to or have already moved part of their manufacturing from China to the U.S.

Ukraine Crisis Sets Back Europe’s Economy

The conflict in Ukraine is taking its worst toll in human lives, but it will also set back Europe’s economic recovery from the pandemic, the International Monetary Fund reports. Rising inflation, spiking energy and food prices, and disruptions to supply chains have lowered the growth projections for multiple countries, especially Ukraine and Russia.

The IMF’s latest Regional Economic Outlook predicts that several major economies, including France, Germany, Italy and the U.K., will barely expand or contract for two quarters this year. Russia’s invasion of Ukraine is forecast to shrink its economy by 8.5% and Ukraine’s by 35%. The IMF also lowered their GDP growth projections by 1 percentage point for advanced economies and by 1.5 percentage points for emerging economies.

Inflation is also projected to hit decade-highs in many countries, rising by 5.5% in advanced economies and to 9.3% in emerging economies (excluding Belarus, Russia, Turkey and Ukraine). The conflict will decrease economic output, while increasing budgetary pressures, particularly in EU countries hosting the most refugees.

More Companies Concerned About Cyberattacks Than Natural Disasters

More technology companies are concerned about ransomware attacks than any other threat, shows a new risk report from Marsh. Forty-seven percent of respondents say that a cyberattack that shut down their operations or their suppliers would be a catastrophic threat to their company — more than double the response to that question only two years ago.

Another one-third of respondents say a ransomware attack leading to a data breach would be catastrophic. Data breaches are also considered risky, even if they aren’t catastrophic; 83% of respondents said threats to data security and privacy are the top risks to their company. Companies are also concerned about natural disasters and geopolitical events — the number of people who consider a trade war a significant risk is five times higher than two years ago.

As the conflict in Ukraine increases the likelihood of cyberattacks, companies, governments and organizations have had to tighten their cybersecurity protocols or risk substantial harm. The pandemic was also a driver of increased cybersecurity, as firms updated their security controls to account for employees working from home.

What Do Consumers Cut Back On in a Recession?

High inflation in the U.K. has lowered consumer confidence and disposable incomes and raised the specter of a recession, reports Investment Monitor. Britain’s inflation rate hit a 30-year high in March at 7% and is expected to rise to nearly 9% later this year.

A survey by the Office for National Statistics (ONS) revealed that 87% of U.K. adults had seen their cost of living increase in the past month, up from 62% in November. Real incomes have also fallen by almost 2% since last year and are expected to fall another 2.3% this year, according to ONS. As a result, Brits are cutting back on spending, with over half reducing their spending on non-essentials, 45% cutting back on their energy use, and 33% spending less on food and other essential items.

The Bank of England has been under pressure to decrease inflation by raising interest rates without causing a recession.

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