| | | Press release
Economies in fragile and conflict-affected situations (FCS) are burdened by weak institutions and are particularly vulnerable to overlapping shocks¡ªincluding conflict, natural disasters, commodity price swings, and global downturns. Nearly three-quarters of FCS economies have remained classified as such for over a decade, highlighting the persistence of their challenges and underlying fragility. Limited fiscal space further constrains these economies from responding to shocks and investing in essential services such as education, health, and infrastructure.
Conflict is surging, and its effects are devastating. On a five-year basis, the frequency and lethality of conflicts have more than tripled since the early 2000s. Beyond the immense human toll, the economic impact is staggering: high-intensity conflicts are typically followed by a cumulative drop of about 20 percent in GDP per capita after five years, relative to pre-conflict projections.
Nearly 40 percent of the population of FCS economies lives in extreme poverty. By 2030, these economies are projected to account for nearly 60 percent of the world¡¯s extreme poor, up from 50 percent in 2024. They also bear a growing burden of hunger: around 200 million people¡ªnearly one in five¡ªnow face acute food insecurity.
Life expectancy in FCS economies is seven years shorter and infant mortality is more than double the rate in other developing countries. On average, children receive just six years of schooling, and learning poverty remains widespread. Health systems are under severe strain, further weakened by conflict-related disruptions.
Repeated shocks and sluggish growth have contributed to rising debt vulnerabilities in FCS economies. Around 70 percent are now in or at high risk of debt distress. Yet these economies also possess considerable untapped potential, including abundant natural resources, expanding working-age populations, and¡ªonce peace is established¡ªpromising prospects for tourism.
With tailored policies and sustained international support, policy makers in FCS economies can prevent conflict, strengthen governance, accelerate growth, and create jobs¡ªlaying the foundation for more resilient and inclusive development. Targeted assistance¡ªincluding concessional financing, debt relief, and investments in state capacity and governance¡ªwill be crucial. Equally important are efforts to expand access to quality education, healthcare, and infrastructure, and promote private sector development to meet the needs of growing working-age populations.
PRESS RELEASE
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