WB warns uneven global recovery leaving poor nations behind

10 June, 2021 12:00 AM printer

WASHINGTON: Fueled by widespread Covid-19 vaccinations in advanced nations, the world economic recovery has picked up speed, but the upbeat outlook obscures a worrying picture in poor nations, the World Bank said Tuesday.

The global economy is now expected to grow 5.6 percent this year, 1.5 points faster than projected in January — the fastest post-recession bounceback in 80 years, according to the latest Global Economic Prospects (GEP) report, reports AFP.

However, the bank warns that many countries, especially poor nations, are being left behind and will take years to return to their pre-pandemic levels.

“The near-term resumption of growth cannot make up for the misery that the pandemic has inflicted on the poorest and its disproportionate impact on vulnerable groups,” World Bank Group President David Malpass said.

“Globally coordinated efforts are essential to accelerate vaccine distribution and debt relief, particularly for low-income countries.”

And while inflation is not seen a major factor, rising prices create another challenge for policymakers, especially in emerging markets, as they try to restore order in their economies and manage rising debt levels.

The World Bank cut its forecasts for about 40 percent of emerging markets and developing nations, and without the boost from China’s massive economy, those countries will expand by only 4.4 percent.

The report also cuts the forecast for low-income countries for this year and next, and the group is expected to expand by only 2.9 percent, the slowest growth in two decades other than 2020.

“By the end of this year, more than 100 million people are expected to have fallen back into extreme poverty,” the World Bank cautions.

“This is a tale of two recoveries,” World Bank economist Ayhan Kose told AFP, noting that most economies will not return to pre-pandemic levels until 2023 and beyond.

The United States will see growth it has not experienced in decades of 6.8 percent — more than three full points higher than in January — while China will expand 8.5 percent and India by 8.3 percent, according to the report.

“You have countries that have the means to vaccinate, and those that have not made enough progress,” he said. “It’s like the best of times for advanced economies and the worst of times for these low-income countries.”

The critical piece is ensuring all countries have wide access vaccines, said Kose, head of the GEP group.

So far only 0.3 percent of people in low income countries have received at least one dose of the vaccine.

 “It is going to be absolutely essential to vaccinate, vaccinate rapidly and vaccinate everywhere,” he said. “We are really running behind.”