IMF Finds Inflation Pushed 23 Million More Into Poverty

The International Monetary Fund released research on Tuesday showing that poor households experience higher inflation rates than standard economic measures indicate. Because these populations spend a larger share of their budgets on food and energy, they are more susceptible to price spikes. Using a new economic model, the organization found that 23 million more people fell below the extreme poverty line between 2021 and 2024 than previous estimates suggested.

Recurring price surges, driven by the 2022 invasion of Ukraine and conflict in the Middle East, have pushed inflation expectations higher and threatened global economic stability. The IMF recommends targeted cash transfers as the most efficient method to protect vulnerable populations, arguing that producer subsidies and price controls are less effective and more expensive.

While global economic output is projected to expand by 3% in 2026, the IMF warned that risks remain high due to escalating attacks involving the United States and Iran. Shantayanan Devarajan, a Georgetown University professor and former World Bank economist, urged developing countries to implement growth-boosting reforms immediately, noting that growth in low-income countries has reached an all-time low.