The World Bank Warns of Global Economy’s Grim Outlook
The global economy faces a bleak outlook as a result of the pandemic's long-term impact, but this impact may not be felt equally by all countries. Come read our article to learn more.
Global growth will fall from 5.5% in 2021 to 4.1% this year, warned World Bank President David Malpass. Overall, the global economy is facing a “grim outlook,” due to the lasting impact of the pandemic. Poorer countries and already marginalized populations are feeling the impact more than the prosperous and rich, as recent data reveals that global inequality has increased because of the pandemic.
Poorer Countries Worryingly Less-Equipped to Handle the Pandemic
While the economic fallout of the pandemic is being felt around the world, it is predicted that, by 2023, advanced economies including the US, Europe, and Japan will have rebounded, and their economic activity will be back on track. Whereas poorer countries will continue to feel the impact of the pandemic for years to come, and by 2023, economic output in developing and emerging countries is predicted to remain 4% lower than pre-covid levels.
Richer countries were able to respond to the pandemic more effectively because they had more resources and better-prepared infrastructure for providing emergency healthcare, distributing vaccines, and responding to economic crises, such as providing funds to economic sectors hit the hardest by the pandemic. Poorer countries, on the other hand, were less able to respond quickly to the pandemic's unprecedented demands, and as a result, were hit harder socially and economically.
Global Inequality Intensifies
The inequality that already existed is being magnified in the wake of the pandemic. Poorer countries are particularly vulnerable to economic turmoil, and already-marginalized people have faced unequal levels of suffering.
Oxfam has highlighted the true nature of some communities' inequalities, reporting that a clear message has been delivered throughout the pandemic: "hunger may kill us before coronavirus." In many countries, deaths from hunger outnumber those from the virus.
The pandemic has forced even more people into poverty. There are half a billion more people now living in extreme poverty compared to when the pandemic began. Data shows that the most marginalized populations, such as women, are feeling the impact of the pandemic worse than others. More women than men have been forced into extreme poverty following the pandemic, and the loss of jobs has been disproportionate between the genders, with women suffering the most. Girls were also more likely to have dropped out of school than boys.
Will Any Global Economies Grow in 2022?
India represents a ray of hope, with its growth rate predicted to rise from 8.3% to 8.7% in 2022. Other emerging markets, including Latin America and the Caribbean, are not expected to be as fortunate. Growth in these regions will slow, dropping from 6.7% in 2021 to just 2.6% this year.
In Europe, the UK will likely experience some economic recovery, with projections expecting 4.7% growth this year, representing faster growth than the other six G7 industrial nations (the US, Japan, Germany, France, Italy and Canada).
While the global outlook is grim, some global economies may prosper, which could provide a boost to the rest of the world. However, it is too soon to tell what the full economic impact will be.
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