In this article, we take a look at 35 countries with the lowest poverty rate in the world. If you would like to skip our detailed analysis of poverty reduction, you can directly go to 10 Countries with the Lowest Poverty Rate in the World.
Combatting Poverty – The Case of India
Poverty is one of the most significant issues plaguing countries in the modern era. According to predictions by the United Nations, if current patterns stay consistent, an estimated 7% of the world’s population could still be living in poverty by 2030. This amounts to almost 575 million people. This is why several countries have made it a priority to combat poverty, India being one of them. In 2023, UNDP reported that the country had managed to lift 415 million individuals out of poverty within a span of 15 years from 2005/6 to 2019/21. In other words, the country had halved its multidimensional poverty in less than two decades. Note that data from the year 2020 is missing due to the COVID-19 pandemic.
Another report by Surjit S. Bhalla and Karan Bhasin, published on March 1, 2024, showcased that India had managed to eliminate poverty below the $1.90-a-day poverty line. This is the old poverty line used by the World Bank before it decided to update the line to $2.15 a day in September 2022.
UNDP’s 2023 report on the Multidimensional Poverty Index, released July 11, 2023, noted that India had reduced deprivation across all indicators of multidimensional poverty from 2005/6 to 2019/21. Multidimensional poverty measures poverty across three dimensions: monetary poverty, education, and basic infrastructure. There are a total of 12 indicators across these three dimensions, and if people are deprived of three or more of them, they are considered to be ‘multidimensionally poor.’ In India, the overall incidence of multidimensional poverty decreased from 55.1% to 16.4%. The percentage of those deprived of adequate nutrition fell from 44.3% to 11.8%.
The percentage of those who were poor and deprived of cooking fuel fell from 52.9% to 13.9%. The number of those deprived of sanitation decreased from 50.4% to 11.3%. Moreover, the number of those who were multidimensionally poor and deprived of adequate drinking water decreased from 16.4% to 2.7%. Lastly, the percentage of individuals deprived of adequate housing lowered from 44.9% to 13.6%. Thus, India showed remarkable progress in decreasing multidimensional poverty throughout all its indicators.
How Did India Achieve its Goals?
A report by Reuters mentioned that the Indian government supplies free food grains to more than 800 million people. This is one of the elements that helped improve nutrition in the country. Furthermore, the government has also spent billions on subsidizing services such as electricity, education, and health, further lessening the region’s poverty. The report by Surjit S. Bhalla and Karan Bhasin mentioned that much of the poverty decrease occurred due to the redistribution policies that led to a wide variety of publicly funded programs.
One example is improved access to piped water. In 2019, rural access to piped water was 16.8%. In 2024, at the time of the report’s publishing, the access stood at 74.7%. Another example is the Aspirational District Program, launched in 2018, which identified 112 districts that had the lowest development indicators in the country. The program encourages districts to launch their own local projects that drive socio-economic improvements. Some best-case practices include centralized kitchens, child protection units, classrooms for visually impaired children, construction of subsurface dams, and high-density farming initiatives.
The Country’s Economic Outlook
Economic growth and poverty reduction have gone hand in hand for the state of India. In 2022, the World Bank listed India as one of the fastest-growing economies in the world. It is also one of the fastest-developing countries in the world in 2024. In fiscal year 2022-2023, India’s real GDP showed an estimated growth rate of 6.9%, while its GDP per capita growth rate amounted to 5.69%. In the same year, the fiscal deficit fell to 9.4%, compared to 13% in 2020-2021, as reported by the World Bank. Despite environmental challenges such as disruption of supply lines, India has proven that it is possible for countries to improve their economy while also working to eliminate poverty. India is also expected to become one of the largest economies in the world by 2100, with an estimated share of 15.61% in the global GDP.
Companies such as Reliance Industries Limited (NSE:RELIANCE) have been a massive contributor to economic growth within India. On April 12, 2024, Reliance Industries Limited (NSE:RELIANCE) had a market cap of 19.873 trillion INR or $237 billion. On January 19, 2024, the company released its earnings for Q4 2023. The company’s gross revenue for the quarter amounted to $29.8 billion. The company reported earnings per share of $0.30. As for the entire fiscal year of 2023, Reliance Industries Limited (NSE:RELIANCE) reported gross revenue of $118.6 billion.
Hindustan Unilever Limited (NSE:HINDUNILVR) is another one of the largest companies in India. On April 12, 2024, Hindustan Unilever Limited (NSE:HINDUNILVR) had a market cap of 5.251 trillion INR. Hindustan Unilever Limited (NSE:HINDUNILVR) is also one of the leading FMCG companies in India to integrate electric vehicles in their delivery system to improve sustainability. On April 1, 2024, the company reported that its pilot project of two EVs in Delhi increased delivery by 10-20%. Now, the company has expanded to around 106 EVs that drive sustainability while also requiring less maintenance than diesel-powered vehicles. In the last five years, Hindustan Unilever Limited (NSE:HINDUNILVR) has also managed to reduce its total distance traveled by 10%, leading to a decrease in CO2 emissions. You can also take a look at the Top 20 Most Valuable Indian Companies.
Others in the Same Boat
India is not the only country that has achieved remarkable progress in reducing poverty. The 2023 MPI reported that 25 other countries had halved their multidimensional poverty within 15 years. These include states such as Albania, Peru, Indonesia, Morocco, Nepal, Vietnam, and several others. While many of these countries have a long way to go before they entirely eliminate extreme poverty, some have almost or wholly accomplished this feat. We have compiled a list of 35 countries with the lowest poverty rates in the world, many of whom serve as examples for those currently battling large amounts of poverty.
Pixabay/Public Domain
Our Methodology
In order to compile this list of 35 countries with the lowest poverty in the world, we consulted our research for the 50 Richest Countries in the World by GDP Per Capita in 2024. From these 50 countries, we shortlisted 35 for which we had poverty data available from the World Bank. The countries are ranked in descending order from most to least poverty based on the $2.15 poverty line, as per data by the World Bank for the latest available year.
In order to tiebreak, we have utilized GDP per capita growth rates. We have calculated the rates for 2023 based on GDP per capita data from the IMF. We hypothesize that countries with high values of GDP per capita and GDP per capita growth rates, along with lower values of poverty, will have the least amount of poverty and will be the fastest to reduce poverty. Note that these countries may still have a high poverty rate based on their national poverty lines, but they have minimal poverty as per international standards. Based on this methodology, here are the 35 countries with the lowest poverty in the world.
We have also mentioned the world average poverty rate for the respective years to give an accurate analysis, since the countries with the lowest poverty rates will have poverty rates lower than the global average.
35 Countries with the Lowest Poverty Rate in the World
35. Panama
Poverty Rate (2023): 1.3%
Global Average Poverty Rate (2023): 8.5%
GDP per capita Growth Rate (2023): 6.22%
According to World Bank data, social assistance programs have been a critical driving force behind decreasing rural poverty in Panama. These include universal school scholarships, conditional cash transfers, and noncontributory old-age pensions. Panama is one of the countries with the lowest poverty rates in the world, and it is also one of the best countries for migration by investment, ranking sixth in that list.
34. Italy
Poverty Rate (2021): 0.8%
Global Average Poverty Rate (2021): 9.5%
GDP per capita Growth Rate (2023): 8.98%
Even though Italy ranks as one of the countries with the lowest poverty in the world by international standards, the national standards paint a different picture. According to the country’s national statistics institute, ISTAT, one in twelve Italians lives in absolute poverty based on national poverty measures. This means that almost 5.67 million individuals had income below a level deemed nationally sufficient to ensure all their basic needs.
33. Japan
Poverty Rate (2013): 0.7%
Global Average Poverty Rate (2013): 11.6%
GDP per capita Growth Rate (2023): 0.28%
Japan is one of the countries with the lowest poverty in the world, with an estimated poverty rate of 0.7%. The country is also predicted to become one of the world’s largest economies by 2100, with an estimated share of 1.59% in the global GDP and a GDP PPP of $7.14 trillion.
32. Sweden
Poverty Rate (2021): 0.6%
Global Average Poverty Rate (2021): 9.5%
GDP per capita Growth Rate (2023): -1.73%
Sweden had a poverty rate of 0.6% in 2021, making it one of the countries with the lowest poverty in the world. Increased employment is one of the strategies the Swedish government has employed to combat poverty rates over the past few years.
31. Spain
Poverty Rate (2021): 0.6%
Global Average Poverty Rate (2021): 9.5%
GDP per capita Growth Rate (2023): 11.04%
On May 21, 2020, Reuters reported that Spain had announced an income scheme for 2.5 million people in order to fight poverty. Under this scheme, the government planned to spend around 3 billion euros to provide wages to the poorest people in the country.
30. Australia
Poverty Rate (2018): 0.5%
Global Average Poverty Rate (2018): 8.8%
GDP per capita Growth Rate (2023): -2.04%
Changes to the Australian social security system have played a massive role in decreasing the country’s poverty since 1999. An example of this is the weekly increase of $32 granted to the single rate of pensions. Australia is currently one of the countries with the lowest poverty in the world.
29. Austria
Poverty Rate (2021): 0.5%
Global Average Poverty Rate (2021): 9.5%
GDP per capita Growth Rate (2023): 11.15%
Austria has lowered poverty by providing social benefits such as increasing compensatory allowances on small pensions during the COVID-19 pandemic. The European Anti-Poverty Network has reported that social benefits such as these can reduce the risk of poverty from 44% to 15%.
28. Hungary
Poverty Rate (2021): 0.4%
Global Average Poverty Rate (2021): 9.5%
GDP per capita Growth Rate (2023): 13.43%
Since 2010, child poverty in Hungary has fallen at the fastest rate among EU countries, as reported by the Hungarian Conservative. The country’s foremost step towards decreasing poverty has been to increase earnings by expanding employment.
27. Estonia
Poverty Rate (2021): 0.3%
Global Average Poverty Rate (2021): 9.5%
GDP per capita Growth Rate (2023): 10.17%
With a poverty rate of 0.3%, Estonia is one of the countries with the lowest poverty rates in the world. It also has a GDP per capita growth rate of 10.17%, which is among the highest on this list.
26. Malta
Poverty Rate (2020): 0.3%
Global Average Poverty Rate (2020): 9.7%
GDP per capita Growth Rate (2023): 11.18%
Malta lowers the incidence of poverty by providing social transfers to low-income individuals, such as those earning minimum wage. These transfers include free education, free healthcare, free childcare for working parents, and other cash and in-kind benefits.
25. Lithuania
Poverty Rate (2021): 0.3%
Global Average Poverty Rate (2021): 9.5%
GDP per capita Growth Rate (2023): 13.97%
Lithuania is one of the countries with the lowest poverty rates in the world. Even when poverty is measured by the country’s own absolute poverty line, less than 4% of the population lives below this line. The absolute poverty line is set at 354 euros a month for a single person and 743 euros a month for a family consisting of two adults and two children.
24. Croatia
Poverty Rate (2021): 0.3%
Global Average Poverty Rate (2021): 9.5%
GDP per capita Growth Rate (2023): 14.04%
Croatia has introduced several plans, such as the Croatian National Development Strategy until 2030, as a means of fighting poverty within the country. This is why the country has managed to achieve one of the lowest poverty rates in the world, along with a GDP per capita growth rate of 14%.
23. Norway
Poverty Rate (2019): 0.2%
Global Average Poverty Rate (2019): 8.9%
GDP per capita Growth Rate (2023): -6.19%
Universal welfare schemes and high labor market participation are the two leading causes of poverty reduction in Norway. According to an OECD report, the country has also reduced poverty by allocating financial aid to UN agencies that focus particularly on reducing poverty.
22. Canada
Poverty Rate (2019): 0.2%
Global Average Poverty Rate (2019): 8.9%
GDP per capita Growth Rate (2023): -3.25%
Despite a contraction in GDP per capita growth, Canada continues to be one of the countries with the lowest poverty rates globally. In 2019, only 0.2% of the country’s population lived on less than $2.15 a day, which was significantly lower than the global average of 8.9%.
21. Israel
Poverty Rate (2021): 0.2%
Global Average Poverty Rate (2021): 9.5%
GDP per capita Growth Rate (2023): -2.09%
Israel is one of the countries with the lowest poverty rates in the world. In 2021, the country had a poverty rate of 0.2%, which was significantly lower than the global average of 9.5%.
20. South Korea
Poverty Rate (2016): 0.2%
Global Average Poverty Rate (2016): 10.4%
GDP per capita Growth Rate (2023): 2.24%
A 2021 study by Bharali and Gill ascertained that South Korea had managed to reduce poverty by focusing on agricultural productivity and rural livelihoods. Other factors that helped the country reduce poverty included export-orientedness and investment in human capital.
19. Denmark
Poverty Rate (2021): 0.2%
Global Average Poverty Rate (2021): 9.5%
GDP per capita Growth Rate (2023): 4.54%
Like other Scandinavian countries and welfare states, Denmark has also managed to reduce extreme poverty through the provision of social benefits pertaining to health, education, employment, and all other walks of life. This is why Denmark is one of the countries with the lowest poverty rates globally.
18. United States
Poverty Rate (2021): 0.2%
Global Average Poverty Rate (2021): 9.5%
GDP per capita Growth Rate (2023): 5.33%
Policies and programs such as food assistance, family tax credits, and housing assistance contribute to reducing poverty in the United States. The United States Census Bureau reports that in 2021, government assistance lifted 45.4 million individuals out of poverty.
17. United Kingdom
Poverty Rate (2021): 0.2%
Global Average Poverty Rate (2021): 9.5%
GDP per capita Growth Rate (2023): 7.59%
In 2021, only 0.2% of the UK’s population lived below the $2.15 poverty line, whereas the global average was 9.5%. The UK is also one of the richest countries by GDP per capita. This is why it is on our list of countries with the lowest poverty.
16. Portugal
Poverty Rate (2021): 0.2%
Global Average Poverty Rate (2021): 0.2%
GDP per capita Growth Rate (2023): 9.52%
Portugal has a fairly progressive tax system, ameliorated further by recent tax reforms. Transfer payments such as non-pension benefits are vital in reducing both poverty as well as inequality within the country.
15. Luxembourg
Poverty Rate (2021): 0.1%
Global Average Poverty Rate (2021): 9.5%
GDP per capita Growth Rate (2023): 7.11%
In October 2023, UNDP reported that Luxembourg had invested $6.36 million in the agency, a significant chunk of which would go towards poverty and inequality. Luxembourg’s investment showcases that poverty alleviation is a critical agenda point for the country, which is why it is one of the countries with the lowest poverty in the world.
14. The Netherlands
Poverty Rate (2021): 0.1%
Global Average Poverty Rate (2021): 9.5%
GDP per capita Growth Rate (2023): 7.56%
In 2022, the Netherlands modified its development budget to add an extra €300 million a year from 2022 to 2024. One of the country’s main development targets is reducing poverty and inequality, as mentioned by the national government.
13. Ireland
Poverty Rate (2021): 0.1%
Global Average Poverty Rate (2021): 9.5%
GDP per capita Growth Rate (2023): 8.65%
Ireland has showcased its anti-poverty commitment by signing on to frameworks such as the European Pillar of Social Rights. The country also has a national strategy known as the Roadmap for Social Inclusion, which aims to reduce consistent poverty to 2% by 2025, as per national standards.
12. France
Poverty Rate (2021): 0.1%
Global Average Poverty Rate (2021): 9.5%
GDP per capita Growth Rate (2023): 9.36%
On September 24, 2023, Reuters reported that the government of France had pledged $150 million to IFAD, which is the UN’s fund for fighting poverty and hunger in rural areas within developing countries. This donation showcases France’s commitment to poverty alleviation around the globe.
11. Czech Republic
Poverty Rate (2021): 0.1%
Global Average Poverty Rate (2021): 9.5%
GDP per capita Growth Rate (2023): 13.57%
In 2021, only 0.1% of the Czech Republic’s population lived on less than $2.15 a day, making it one of the countries with the lowest poverty rates globally. This is why it ranks sixth on our list.
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Disclaimer: None. 35 Countries with the Lowest Poverty in the World is originally published on Insider Monkey.
