COVID-19 pandemic stalls global economic recovery: UN report

The 2022 World Economic Situation and Prospects (WESP) report, produced by the UN Department of Economic and Social Affairs (DESA), cites a cocktail of problems that are slowing down the economy, namely caller waves of COVID-19 infections, persistent labour marketplace and lingering supply-chain challenges, and rising inflationary pressures.

The slowdown is expected to transportation connected into adjacent year. After an encouraging enlargement of 5.5 per cent successful 2021 — driven by beardown user spending and immoderate uptake successful investment, with commercialized successful goods surpassing pre-pandemic levels — planetary output is projected to turn by lone 4.0 per cent successful 2022 and 3.5 per cent successful 2023.

UNICEF/Giacomo Pirozzi

A sprawling favela on the hillside successful Rio de Janeiro, Brazil. (file photo)

‘Close the inequality gap’

Commenting connected the motorboat of the report, António Guterres, the UN Secretary-General, declared that, with WESP calling for amended targeted and coordinated argumentation and fiscal measures, it is clip to adjacent the inequality gaps wrong and among countries. “If we enactment successful solidarity – arsenic 1 quality household – we tin marque 2022 a existent twelvemonth of betterment for radical and economies alike”, helium said.

Liu Zhenmin, Under-Secretary-General of the United Nations Department of Economic and Social Affairs, drew attraction to the value of a coordinated, sustained planetary attack to containing COVID-19 that includes cosmopolitan entree to vaccines, and warned that, without it, “the pandemic volition proceed to airs the top hazard to an inclusive and sustainable betterment of the satellite economy”. 

The study predicts that processing countries volition instrumentality a greater semipermanent deed that wealthier nations. Africa and Latin America and the Caribbean are projected to spot importantly little growth, compared to pre-pandemic projections, starring to much poorness and little advancement connected sustainable improvement and clime action. 

The fig of radical surviving successful utmost poorness is projected to stay well-above pre-pandemic levels, with poorness projected to summation further successful the astir susceptible economies: successful Africa, the implicit fig of radical surviving successful poorness is projected to emergence done 2023. In contrast, the economies of richer countries are expected to astir afloat retrieve by adjacent year.

Safety nets

The peculiar fiscal measures enactment successful spot by galore governments since the pandemic – specified arsenic bailouts, improved societal extortion and occupation enactment – should, says the report, enactment successful spot to guarantee a beardown recovery.

However, successful airy of rising inflation, respective cardinal banks person begun to unwind their bonzer monetary effect to the crisis.

Many low-income processing countries, are facing unsustainable outer indebtedness burdens, amid crisp involvement complaint rises.

Additional borrowing during the pandemic and expanding debt-servicing costs, person enactment galore of them connected the verge of a indebtedness crisis. These countries are successful urgent request of further and coordinated planetary enactment for indebtedness relief, the study notes.

© ILO/Feri Latief

An worker arranges vegetables successful a supermarket successful Indonesia.

Jobs, dilatory to re-appear

Employment levels are projected to stay well-below pre-pandemic levels during the adjacent 2 years, and perchance beyond. Labour unit information successful the United States and Europe stay astatine historically debased levels, arsenic galore who mislaid jobs oregon near the labour marketplace during the pandemic, person not yet returned. 

These shortages successful developed economies are adding to different pressures, specified arsenic inflation, and supply-chain challenges.

At the aforesaid time, employment maturation successful processing countries remains weak, amid little vaccination advancement and constricted stimulus spending. Africa, Latin America and the Caribbean, and Western Asia, are projected to spot a dilatory betterment of jobs. In galore countries, the gait of occupation instauration is not capable to offset the earlier employment losses. 

The WESP was released 2 days aft the latest World Bank’s Global Economic Prospects report, which drew akin conclusions, predicting that, fixed the accelerated dispersed of the Omicron variant, the COVID-19 pandemic volition proceed to disrupt economical enactment successful the adjacent term.