The global economy is expected to grow at 5.6 per cent in 2021, although many emerging market and developing economies continue to struggle with the COVID-19 pandemic and its aftermath.
The World Bank said this in its June Global Economic Prospects released on Tuesday in Washington D.C., adding that the expected growth was based largely on strong rebounds from a few major economies.
The 5.6 per cent expected growth, the fastest post-recession pace in 80 years, is an upward review from the 4.1 per cent forecast in January.
According to the bank, in spite of the recovery, global output will be about two per cent below pre-pandemic projections by the end of the year.
Also, per capita income losses would not be unwound by 2022 for about two-thirds of emerging market and developing economies.
It said that among low-income economies, where vaccination had lagged, the effects of the pandemic had reversed poverty reduction gains and aggravated insecurity and other long-standing challenges.
Among major economies, the United States of America’s growth is projected to reach 6.8 per cent, reflecting large-scale fiscal support and the easing of pandemic restrictions, while growth in other advanced economies is also firming, but to a lesser extent.
David Malpass, the World Bank Group President, said that while there were welcome signs of global recovery, the pandemic continues to inflict poverty and inequality on people in developing countries around the world.
He said that globally coordinated efforts were essential to accelerate vaccine distribution and debt relief, particularly for low-income countries.
However, policymakers in these countries should ensure that rising inflation rates do not lead to a de-anchoring of inflation expectations and resist subsidies or price controls to avoid putting upward pressure on global food prices.
Instead, policies focusing on scaling up social safety net programs, improving logistics and climate resilience of local food supply would be more helpful, it added.
