December 03 2020 / by João Paulo Apolinário Passos / World Poverty
Poverty headcount trends in India versus Nigeria
Nigeria is no longer the country with the most people in extreme poverty, with India once again taking the infamous title. This is the result of new data and changing estimates in Real GDP growth rates due to COVID-19.
The Government of Nigeria recently released a new poverty survey for 2018 which provides the basis for our updated estimates. This new survey is not only more up to date but has been conducted with a higher quality process and a more complete questionnaire. It replaces the 2009/10 survey that had previously been the basis for forecasting Nigerian poverty. Looking ahead, the International Monetary Fund has upgraded their estimate of Nigeria’s real GDP growth rate in 2020 to -4.3% compared to its earlier estimate of -5.4%. These changes lower the poverty head count estimate for Nigeria from 105 million to 88 million in 2020.
In India, too, the last official poverty survey covers 2011/12. Problems with the 2018 survey have caused the Government of India to freeze publication of the results. Accordingly, a number of Indian analysts have been using other data to derive best estimates of poverty. We have used one of these studies, conducted by Surjit Bhalla and Arvind Virmani (former Chief Economic Advisor to GOI), finding a 7% poverty rate in India in 2018, as the basis for our new forecasts. India is also experiencing a likely spike in its poverty rate due to the impact of COVID-19 on the economy. Real GDP could fall by as much as 10.3% in 2020 according to the IMF and the Reserve Bank of India, so India’s poverty headcount could rise to 130 million people in 2020.
While the immediate story of whether Nigeria or India has the most poverty has changed, the long-term trends have not. The IMF expects a strong recovery for India, causing the numbers to quickly rebound. At the same time, poverty is expected to continue to rise in Nigeria. By 2022, Nigeria will again have the most people living in extreme poverty in the world.
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