World Bank: world economy will grow by 4% in 2021
In 2021, the world economy will grow by 4%. In Eastern Europe, the economy is expected to raise more modestly – by 1.3%. The reasons for this, World Bank experts call the difficulties caused by the pandemic.
The World Bank’s “Global Economic Outlook” report, which was published on Tuesday this week, notes that the pandemic and measures to control it have a serious negative impact on the global economy. Last year, its growth rate decreased by 4.3%. Millions of people lost their jobs and lost their income.
“Almost all the countries of Europe and Central Asia have announced support packages of fiscal actions.
Despite these and other measures, in the first three quarters of this year, the pandemic is estimated to have caused the loss of millions of jobs in Europe. The increase in an unemployed population was especially noticeable in Central Europe and Russia,” it is said in the regional review of the new World Bank report.
Overall, the World Bank estimates that the decline in global economic activity was slightly less significant than it was previously forecasted, mainly due to the recession containment in developed countries and a stronger recovery in China. At the same time, most emerging market countries and developing economies suffered more significant economic losses than it was expected.
This year the global economy recovery will largely depend on the successful and rapid implementation of the vaccination campaign against COVID-19, which will help to bring the dangerous virus under control.
“The global economy seems to have entered a period of depression recovery. However, everything will depend on how the authorities will cope with the tasks of a huge scale...”, – said the President of the World Bank David Malpass. He specified that these tasks, “first of all, concern healthcare and the financial sphere, but not only”.
“In order to overcome the pandemic impact and neutralize the obstacles to attracting investment, strong efforts are needed to improve the business environment, increase the flexibility of labor and product markets, as well as increase transparency and improve the quality of management,” said David Malpass.
Forecasts for the near-term outlook remain extremely undetermined. Experts consider a variety of possible scenarios. In a pessimistic scenario, assuming the disease growth continuation and delay in the vaccine introduction, global economic growth in 2021 may be limited to 1.6%. Under the optimistic scenario of successfully dealing with the pandemic and accelerating the vaccination process, the world’s economic growth rate could reach 5%.
