• BLOG SURF
After rebounding to an estimated 5.5 percent in 2021, global growth is expected to decelerate markedly in 2022-to 4.1 percent, reflecting continued COVID-19 flare-ups, diminished fiscal support, and lingering supply bottlenecks.
Although output and investment in advanced economies are projected to return to pre-pandemic trends next year, they will remain below in emerging market and developing economies (EMDEs), owing to lower vaccination rates, tighter fiscal and monetary policies, and more persistent scarring from the pandemic.
Various downside risks cloud the outlook, including simultaneous Omicron-driven economic disruptions, further supply bottlenecks, a de-anchoring of inflation expectations, financial stress, climate-related disasters, and a weakening of long-term growth drivers.
Because EMDEs have limited policy space to provide additional support if needed, these downside risks heighten the possibility of a hard landing. This needs the importance of strengthening global cooperation to foster rapid vaccine distribution.- blog.wb.org/blogs
A version of this article appears in the print on January 14, 2022, of The Himalayan Times.