According to the World Bank, global growth is expected to slow “significantly” from 5.5% last year to 4.1% in 2022 and further to 3.2% in 2023.
This is because, as the Bretton Woods Institute pointed out, the government has begun to unleash the large-scale financial and financial support provided early in the pandemic.
Obviously, the World Bank sees a sharp slowdown in global growth and the risk of a “hard landing” in economically vulnerable countries due to continued Covid-19 rekindling, reduced fiscal support, and prolonged supply bottlenecks. increase.
In a recent assessment of the world economy, the World Bank provided a slightly weaker short-term outlook for growth. With the resurgence of pandemics, rising food and energy prices, and more harmful supply disruptions, global inflation is significantly higher than previously expected.
Production and investment in developed countries is projected to return to pre-pandemic trends next year, but immunization rates are more stringent in emerging markets and developing countries (EMDE), especially in small and vulnerable and conflict-stricken countries. Fiscal and monetary policy, and more persistent scars from pandemics.
A variety of downside risks have clouded the World Bank’s outlook, including Omicron-led simultaneous economic turmoil, further supply bottlenecks, unfixed inflation expectations, financial stress, climate-related disasters, and weakening long-term growth drivers. .. These downside risks increase the likelihood of a hard landing, as emerging markets and developing countries have limited policy space to provide additional support as needed.
This emphasizes the importance of strengthening the global
Cooperation to promote rapid and equitable vaccine distribution, coordinate health and economic policies, increase debt sustainability in the poorest countries, and address the increasing costs of climate change.
According to the World Bank, EMDE policymakers are also faced with rising inflationary pressures, spillover effects from future monetary tightening in advanced economies, and tight fiscal space constraints.
In the long run, emerging markets and developing countries are decisive, including reforms that mitigate vulnerability to commodity shocks, reduce income and gender inequality, and strengthen preparedness for health and climate-related crises. Growth needs to be strengthened by pursuing good policy actions.
Overall, growth in the Middle East and North Africa (Mena) regions is expected to accelerate to 4.4% in 2022, be revised upward from June 2021 and slow to 3.4% in 2023, according to the World Bank. increase.
However, the average per capita income gap between Mena and developed countries is projected to widen during the forecast period.
Higher oil and gas prices and higher production are expected to benefit energy exporters. The World Bank also said that the short-term outlook for oil importers has improved.
Nonetheless, the World Bank pointed out that further Covid-19 outbreaks, social unrest, high debt in some economies, and conflicts could undermine Mena’s economic activity.
The World Bank points out that the economic turmoil associated with pandemics remains a major risk, as less than two-fifths of Mena’s population is fully vaccinated and concentrated in the region’s high-income economy. did.
Analysts say changes in oil prices can undermine local activity with different profits and losses for oil importers and exporters. Lack of investment in this sector can also limit oil exporters’ ability to take advantage of high oil prices.
http://www.gulf-times.com/story/708028/Pandemic-resurgence-persistent-supply-bottlenecks- Pandemic revival, sustainable supply bottleneck are squeezing global growth