How does poverty harm country's economy?
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Poverty significantly harms a country's economy in several ways. Firstly, it limits the purchasing power of individuals, leading to reduced consumer spending, which is a key driver of economic growth. According to the World Bank, every 1% increase in poverty results in a 0.7% decrease in economic growth. Secondly, poverty often forces individuals into low-paying and insecure jobs, diminishing their productivity and overall contribution to the economy. This leads to lower national income and tax revenues, hampering government expenditure on crucial sectors such as education and healthcare. Moreover, poverty increases social inequalities, which can amplify social unrest and instability, negatively impacting investment and business confidence. Therefore, addressing poverty is vital in promoting inclusive and sustainable economic development.