1 min read.Updated: 12 Oct 2021, 05:52 AM ISTLivemint
The inequality in the recovery is getting worse across country groups. Per capita income in advanced economies is expected to grow nearly 5% in 2021, but only 0.5% in low-income countries, according to World Bank repot
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Gross Domestic Product (GDP) in many emerging economies will return to pre-pandemic levels next year, while per capita income level in will take longer to recover, World Bank President David R. Malpass said on Monday.
"GDP will return next year to pre-pandemic levels to many emerging and developing economies, but per capita income will take more time to reach 2019 levels. In many countries the recovery is even slower and full of complex challenges," the financial institution's president said during a World Bank event dedicated to post pandemic developing economies growth.
"We expect global growth of 5.7% in 2021 and 4.4% in 2022, these are very similar to our projections in the June Global Economic Prospects report. Incoming high-frequency data point to slowing momentum in global activity amid persistent supply chain bottlenecks and COVID-19 surges.
Moreover, the global recovery remains dramatically uneven. The outlook is challenging for much of the developing world with lagging vaccination rates, rising inflation, limited policy support, too few jobs, and shortages that extend to food, water, and electricity.
The inequality in the recovery is getting worse across country groups. Per capita income in advanced economies is expected to grow nearly 5% in 2021, but only 0.5% in low-income countries. It will take many developing countries years to reach pre-pandemic income levels. Even after two years of recovery, by next year output in developing countries is expected to be nearly 4% below pre-pandemic projections, whereas the advanced economies will be caught up. In IDA countries, output will remain 5.6 percent below pre-pandemic projections by next year. The pandemic has already tipped millions of people into poverty, according to the report.
There was a rebound in 2021 for many emerging economies and developing countries in Europe and Central Asia, whose regional economy is expected to grow by 5.5% in 2021, exceeding projections according to the latest edition of the World Bank's economic update.
Developing markets were hit by the economic shock of the pandemic, with some of them experiencing a significant downturn in their growth rates. However, emerging economies like China and the United Arab Emirates (UAE), which managed to contain the virus from mass spreading in the early stages of the pandemic, are recovering earlier and faster according to the International Monetary Fund (IMF).