A new report by the global institutions also warned that urgent action was needed to tackle climate change, which threatens to exact a hefty toll on particularly poor countries and reverse progress in fighting poverty.
The 2008 Global Monitoring Report, released ahead of the IMF and World Bank meetings in Washington this weekend, said strong economic growth in much of the developing world had contributed to the decline in global poverty.
It said the number of extreme poor -- those living under $1 a day -- declined by 278 million between 1990 and 2004, and by 150 million in the last five years of that period.
Globally about 1 billion people still live in extreme poverty, the report added.
The largest reduction in poverty rates was in regions with the strongest growth, in particular in East Asia, including emerging powerhouses China and India, the report said.
Still, in Africa progress to cut poverty rates has been uneven, it said, with 18 countries showing strong economic growth of about 5.5 percent over the past decade. Twenty others in Africa, however, many hit by conflict, were trapped in low growth, averaging around 2 percent annually.
The report also said that while some progress had been made in meeting eight globally agreed development goals by 2015, prospects were gravest for reducing child and maternal mortality, with serious shortfalls also likely in primary school education, nutrition and sanitation.
Robert Zoellick, the World Bank president, said he was personally worried about shortfalls in fighting hunger and malnutrition, which he termed "the forgotten" millennium development goal.
He said high global food and energy prices had focused increased attention on the issue, but more was needed, especially since higher prices were likely to last for several years.
Zoellick and IMF managing director, Dominique Strauss-Kahn, also pointed to dangers for growth in the developing world from recent financial market turbulence, which began with subprime mortgage market problems in the United States.
Turning to the environment, the report said poverty reduction may not be sustainable if forests are lost, fisheries depleted, water or air is polluted and soil degraded.
It said water scarcity and deforestation were already a factor in the developing world and are valuable assets and sources of income to poor countries.
"The depletion of natural resources and environmental degradation undermines the long-term growth prospects of many developing countries," the report said.
It called for coordinated global action to avert further climate change, adding that extreme climatic events such as droughts and floods in the world's poorest countries may also exacerbate conflicts and cross-country migration.