From Isaac Anumihe, Abuja
In its October World Economic Outlook, World Bank projected global economy to grow 5.9 per cent in 2021 and 4.9 per cent in 2022, 0.1 percentage point lower for 2021 than in the July forecast.
The downward review for 2021 reflects a downgrade for advanced economies—in part due to supply disruptions—and for low-income developing countries, largely due to worsening pandemic dynamics.
This, the bank said, is partially offset by stronger near-term prospects among some commodity-exporting emerging markets and developing economies. Rapid spread of Delta and the threat of new variants have increased uncertainty about how quickly the pandemic can be overcome. Policy choices, according to the global bank, have become more difficult, with limited room to maneuver.
“The global economic recovery is continuing, even as the pandemic resurges. The fault lines opened up by COVID-19 are looking more persistent—near-term divergences are expected to leave lasting imprints on medium-term performance. Vaccine access and early policy support are the principal drivers of the gaps”, the bank said.
In its 2021 World Economic Outlook (WEO) forecast last July, the bank had projected a growth rate of 6.0 per cent in 2021 and 4.9 per cent in 2022.
“The 2021 global forecast is unchanged from the April 2021 WEO, but with offsetting revisions. Prospects for emerging market and developing economies have been marked down for 2021, especially for emerging Asia. By contrast, the forecast for advanced economies is revised up. These revisions reflect pandemic developments and changes in policy support. The 0.5 percentage-point upgrade for 2022 derives largely from the forecast upgrade for advanced economies, particularly the United States, reflecting the anticipated legislation of additional fiscal support in the second half of 2021 and improved health metrics more broadly across the group”, the July forecast said.
But it noted that recent price pressures for the most part reflected unusual pandemic-related developments and transitory supply-demand mismatches.
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