The global economy is facing its fastest recovery from recession in more than 80 years, but poor countries are at risk of falling further behind wealthy ones slow progress on the Covid-19 vaccinesaid the World Bank.
In its semi-annual outlook report, the Washington-based institution said the world economy will grow 5.6% this year, a significant appreciation from earlier estimates of 4.1% in January.
This would represent the fastest post-recession recovery in 80 years, driven by growth in some major economies where rapid advances in the Covid-19 vaccine have allowed a faster return to relative normalcy. Developing countries, however continue to struggle with the virus and its aftermath longer, the divide between rich and poor nations worsens.
Calling for wider distribution of Covid-19 vaccines to low-income countries where progress has been slower, he said the global economy will be about 2% below what it would have been without the pandemic by 2022, but that poorer countries are lagging behind.
The bank raised the alarm over the uneven recovery, saying that around 90% of rich nations will return to pre-pandemic GDP by 2022, compared with only about a third of low-income countries.
David Malpass, the bank’s president, said, “While there are welcome signs of global recovery, the pandemic continues to inflict poverty and inequality on people in developing countries around the world.
“Globally coordinated efforts are essential to accelerate vaccine distribution and debt relief, especially for low-income countries. As the health crisis eases, policymakers need to address the lasting effects of the pandemic and take steps to fuel green, resilient and inclusive growth while maintaining macroeconomic stability. “
The intervention comes as pressure mounts on G7 leaders meeting in Carbis Bay in Cornwall, England this week to increase their spending in support of low-income countries and provide more Covid-19 vaccines.
More than 100 former prime ministers, presidents and foreign ministers have called for leaders from the group of rich western economies to be rich agree to provide two-thirds of the $ 66 billion (£ 46.6 billion) needed to vaccinate low-income countries against Covid.
The letter’s signatories included former British Prime Ministers Gordon Brown and Tony Blair, as well as prominent figures such as former UN Secretary-General Ban-Ki Moon and 15 former African leaders.
Publication of its Global Economic Prospects (GEP) report, the World bank said the Covid-19 pandemic undermined years of progress in poverty reduction, exacerbated economic uncertainty in poorer countries and exacerbated other long-standing challenges.
By the end of this year, warnings had been issued that around 100 million people in low-income countries would fall back into extreme poverty.
The 189-country development agency expected the U.S. economy to grow 6.8% this year, thanks to extensive government support and the easing of pandemic restrictions amid advances in the introduction of the Covid-19 vaccine. In other advanced economies, growth is increasing, albeit to a lesser extent.
China is expected to grow 8.5% after returning to growth earlier than other countries that suffered at the start of the pandemic when Covid-19 was first identified in late 2019.
Growth in emerging and developing countries is expected to increase by 6%, aided by demand for natural resources and increased commodity prices, as international trade recovers from the pandemic. Without China, however, developing markets are expected to grow a more modest 4.4%, curbed by slower progress on the Covid-19 vaccine and a resurgence in infection rates.
The World Bank said that profits for this group of countries – which include India, South Africa, Bangladesh, and Mexico – would not be enough to offset losses from the 2020 recession and that production in 2022 is still around 4.1 % below what it should be before the recession. Pandemic Projections.
“Losses are likely to exacerbate deprivations related to health, education and living standards. Even before the Covid-19 crisis, key growth drivers were expected to lose momentum and the trend is likely to be exacerbated by the scarring effects of the pandemic, “the bank said.