Global Economic Prospects - World Bank Group

Putting more countries on a favorable growth path will require concerted international action and a comprehensive set of national policy responses.”. Thispagein: EN Español Français Русский 中文 Português العربية 日本語 Thispagein:  English Español Français Русский 中文 Português العربية 日本語 ReportSections OVERVIEW Foreword OUTLOOK TOPICALISSUES DOWNLOADS GlobalEconomicProspects GlobalEconomicProspects Togglenavigation OVERVIEW Foreword OUTLOOK TOPICALISSUES DOWNLOADS SlowingGrowth,RisingRisks TheglobalrecoveryissettodecelerateamidcontinuedCOVID-19flare-ups,diminishedpolicysupport,andlingeringsupplybottlenecks.Theoutlookiscloudedbyvariousdownsiderisks,includingnewvirusvariants,unanchoredinflationexpectations,andfinancialstress.Ifsomecountrieseventuallyrequiredebtrestructuring,therecoverywillbemoredifficulttoachievethaninthepast.Climatechangemayincreasecommoditypricevolatility.Socialtensionsmayheightenasaresultoftheincreaseininequalitycausedbythepandemic.Thesechallengesunderscoretheneedtofosterwidespreadvaccination,enhancedebtsustainability,tackleclimatechangeandinequality,anddiversifyeconomicactivity. TheglobalrecoveryissettodecelerateamidcontinuedCOVID-19flare-ups,diminishedpolicysupport,andlingeringsupplybottlenecks.Theoutlookiscloudedbyvariousdownsiderisks,includingnewvirusvariants,unanchoredinflationexpectations,andfinancialstress.Ifsomecountrieseventuallyrequiredebtrestructuring,therecoverywillbemoredifficulttoachievethaninthepast.Climatechangemayincreasecommoditypricevolatility.Socialtensionsmayheightenasaresultoftheincreaseininequalitycausedbythepandemic.Thesechallengesunderscoretheneedtofosterwidespreadvaccination,enhancedebtsustainability,tackleclimatechangeandinequality,anddiversifyeconomicactivity. TheglobalrecoveryissettodecelerateamidcontinuedCOVID-19flare-ups,diminishedpolicysupport,andlingeringsupplybottlenecks.Theoutlookiscloudedbyvariousdownsiderisks,includingnewvirusvariants,unanchoredinflationexpectations,andfinancialstress.Ifsomecountrieseventuallyrequiredebtrestructuring,therecoverywillbemoredifficulttoachievethaninthepast.Climatechangemayincreasecommoditypricevolatility.Socialtensionsmayheightenasaresultoftheincreaseininequalitycausedbythepandemic.Thesechallengesunderscoretheneedtofosterwidespreadvaccination,enhancedebtsustainability,tackleclimatechangeandinequality,anddiversifyeconomicactivity. Downloads Fullreport Foreword GDPgrowthdata Reportcharts Executivesummary Pressrelease Reportarchives Downloads Fullreport Foreword GDPgrowthdata Reportcharts Executivesummary Pressrelease Reportarchives     DownloadtheFebruaryissue   DownloadtheOctoberissue       PolicyResearchWorkingPapers Downloadworkingpapersonmajormacroeconomicpolicyissues Foreword InhisForeword,WBGPresidentDavidMalpassreflectsonbothencouragingandtroublingeconomicdevelopments,cloudedbymanyrisksandconsiderableuncertaintyandnotes,“Againstthismixofencouragingandtroublingnews,itisclearthatchallengingtimeslieaheadfortheglobaleconomy—andparticularlyfordevelopingcountries—aseconomicstimulusslowsandcreditconditionstighten.Puttingmorecountriesonafavorablegrowthpathwillrequireconcertedinternationalactionandacomprehensivesetofnationalpolicyresponses.” DownloadForeword GlobalandRegionalOutlooks Global Globalgrowthisexpectedtodecelerateto4.1percentin2022,reflectingcontinuedCOVID-19flare-ups,diminishedfiscalsupport,andlingeringsupplybottlenecks.Althoughoutputandinvestmentinadvancedeconomiesareprojectedtoreturntopre-pandemictrendsnextyear,inemergingmarketanddevelopingeconomies(EMDEs)theywillremainmarkedlybelow.Downsideriskstotheglobaloutlookincludeasynchronizedpandemicresurgence,furthersupplydisruptions,ade-anchoringofinflationexpectations,unexpectedfinancialstress,andpossibleclimate-relateddisasters.EMDEpolicymakersfacethechallengesofheightenedinflationarypressuresandconstrainedfiscalspace.Overthelongerterm,EMDEswillneedtopursuereformsthatmitigatevulnerabilitiestocommodityshocks,reduceinequality,andenhancecrisispreparedness. SeeLess Globalgrowthisexpectedtodecelerateto4.1percentin2022,reflectingcontinuedCOVID-19flare-ups,diminishedfiscalsupport,andlingeringsupplybottlenecks.Althoughoutputandinvestmentinadvancedeconomiesareprojectedtoreturntopre-pandemictrendsnextyear,inemergingmarketanddevelopingeconomies(EMDEs)theywillremainmarkedlybelow.Downsideriskstotheglobaloutlookincludeasynchronizedpandemicresurgence,furthersupplydisruptions,ade-anchoringofinflationexpectations,unexpectedfinancialstress,andposs... SeeMore Outlook Highlights ChartsandData GlobalandRegionalOutlooks EastAsiaandPacific GrowthintheEastAsiaandPacific(EAP)regionisprojectedtoslowto5.1percentin2022.WhilegrowthinChinaisforecasttoeaseto5.1percentamidtighterregulationsanddiminishedsupportfromexports,thatintherestoftheregionisprojectedtoaccelerateto5percentin2022,buoyedbythereleaseofpent-updemandandacceleratedCOVID-19vaccination.Inaboutone-fifthofcountries—mostnotablyintourism-dependenteconomies—theprojectedrecoverywillnotbesufficienttoreturnoutputtoits2019levelsduringtheforecastperiod.Downsideriskstotheoutlookincluderecurrentmobilityrestrictionsinthecontextofpandemicresurgenceandincompletevaccinations,heightenedfinancialstress,anddisruptionsfromnaturaldisasters. SeeLess GrowthintheEastAsiaandPacific(EAP)regionisprojectedtoslowto5.1percentin2022.WhilegrowthinChinaisforecasttoeaseto5.1percentamidtighterregulationsanddiminishedsupportfromexports,thatintherestoftheregionisprojectedtoaccelerateto5percentin2022,buoyedbythereleaseofpent-updemandandacceleratedCOVID-19vaccination.Inaboutone-fifthofcountries—mostnotablyintourism-dependenteconomies—theprojectedrecoverywillnotbesufficienttoreturnoutputtoits2019levelsduringtheforecastp... SeeMore Outlook Highlights ChartsandData GlobalandRegionalOutlooks EuropeandCentralAsia OutputinEuropeandCentralAsia(ECA)isestimatedtohaveexpandedby5.8percentin2021,reflectingareboundindomesticdemandandpositivespilloversfromfirmingactivityintheeuroarea.Growthisforecasttoslowto3percentin2022,asdomesticdemandstabilizes,and2.9percentin2023,asexternaldemandplateausandcommoditypricessoften.Thenear-termoutlookisweakerthanpreviouslyprojected,owingtorecurrentCOVID-19flareups,afaster-than-expectedwithdrawalofmacroeconomicpolicysupport,andsharpincreasesinpolicyuncertaintyandgeopoliticaltensions.Thepaceofgrowthovertheforecasthorizonwillleaveoutputslightlylowerthanitspre-pandemictrendby2023,andthecatch-upofpercapitaincomegrowthwithadvancedeconomieswillbeslowerduring2021-23thaninthedecadebeforethepandemic.Keyriskstotheregionaloutlookincludeafurtherresurgenceofthepandemic,financialstress,lesssupportiveexternalconditionsthanexpected,andanadditionalriseinpolicyuncertaintyorescalationingeopoliticaltensions. SeeLess OutputinEuropeandCentralAsia(ECA)isestimatedtohaveexpandedby5.8percentin2021,reflectingareboundindomesticdemandandpositivespilloversfromfirmingactivityintheeuroarea.Growthisforecasttoslowto3percentin2022,asdomesticdemandstabilizes,and2.9percentin2023,asexternaldemandplateausandcommoditypricessoften.Thenear-termoutlookisweakerthanpreviouslyprojected,owingtorecurrentCOVID-19flareups,afaster-than-expectedwithdrawalofmacroeconomicpolicysupport,andsharpincreasesinpol... SeeMore Outlook Highlights ChartsandData GlobalandRegionalOutlooks LatinAmericaandtheCaribbean GrowthinLatinAmericaandtheCaribbean(LAC)reboundedtoanestimated6.7percentin2021,boostedbysupportiveexternalconditionsand,inthesecondhalfoftheyear,rapidprogressonCOVID-19vaccinationandasharpdropinnewcases.Regionalgrowthisprojectedtoslowto2.6percentin2022and2.7percentin2023,reflectingsluggishlabormarketimprovement,tightermacroeconomicpolicy,softerexternaldemand,andafadingboostfromlastyear’sriseincommodityprices.Growthduringtheforecasthorizonwillnotbesufficientlyrobusttoreversetheregion’slong-standingdeclineinpercapitaincomerelativetoadvancedeconomies.DownsideriskstotheforecastincluderenewedsurgesinCOVID-19cases;financialstress;disruptionsrelatedtonaturaldisasters,includingweathereventslinkedtoclimatechange;and,inthelongerterm,failuretoimplementproductivity-enhancingandotherneededreforms. SeeLess GrowthinLatinAmericaandtheCaribbean(LAC)reboundedtoanestimated6.7percentin2021,boostedbysupportiveexternalconditionsand,inthesecondhalfoftheyear,rapidprogressonCOVID-19vaccinationandasharpdropinnewcases.Regionalgrowthisprojectedtoslowto2.6percentin2022and2.7percentin2023,reflectingsluggishlabormarketimprovement,tightermacroeconomicpolicy,softerexternaldemand,andafadingboostfromlastyear’sriseincommodityprices.Growthduringtheforecasthorizonwillnotbesufficiently... SeeMore Outlook Highlights ChartsandData GlobalandRegionalOutlooks MiddleEastandNorthAfrica GrowthintheMiddleEastandNorthAfricaregionisforecasttoaccelerateto4.4percentin2022,reflectingtaperingoilproductioncutsandacceleratingvaccineprogress,beforeslowingto3.4percentin2023.Outputin2023isprojectedtoremainabout5percentsmallerthanexpectedbeforethepandemic.Growthprospectsareunevenacrosstheregion,withriskstotheoutlookpredominatelytothedownside.FurtherCOVID-19outbreaks,socialunrest,highdebtinsomeeconomies,andconflictcouldundermineeconomicactivity.Delaysinstructuralreformsortransitioningawayfromfossilfuels,aswellasgovernancesetbacks,couldfurtherconstraingrowthprospects.Withclimatechangeincreasingthefrequencyofnaturaldisastersinanalreadywater-scarceregion,adaptationwillhavetoacceleratetolimitfutureeconomicdisruption. SeeLess GrowthintheMiddleEastandNorthAfricaregionisforecasttoaccelerateto4.4percentin2022,reflectingtaperingoilproductioncutsandacceleratingvaccineprogress,beforeslowingto3.4percentin2023.Outputin2023isprojectedtoremainabout5percentsmallerthanexpectedbeforethepandemic.Growthprospectsareunevenacrosstheregion,withriskstotheoutlookpredominatelytothedownside.FurtherCOVID-19outbreaks,socialunrest,highdebtinsomeeconomies,andconflictcouldundermineeconomicactivity.Delaysinstruc... SeeMore Outlook Highlights ChartsandData GlobalandRegionalOutlooks SouthAsia OutputinSouthAsiaisprojectedtoexpandby7.6percentin2022,acceleratingfrom7.0percentthepreviousyear,asCOVID-19vaccinationprogressesandcontact-intensivesectorsrecover.Despitetwoyearsofrobustgrowth,theprojectedrateofpercapitaincomecatch-upwithadvancedeconomiesfor2021-23hasslowedandisonlyabouthalftherateofcatch-upachievedinthedecadepriortothepandemic.Aresurgenceofthepandemic,especiallywiththeemergenceofOmicron,isakeyrisktotheoutlook.Otherdownsiderisksincludeinflationarypressuresrequiringmoremonetarypolicytighteningthanisassumedinthebaseline,andasuddentighteningoffinancingconditionsexacerbatedbythere-emergenceofstressinthefinancialsector.Therisingfrequencyandcostofnaturalandclimate-relateddisastersexposetheregiontoclimate-inducedincreasesinpoverty,disease,childmortality,andfoodprices. SeeLess OutputinSouthAsiaisprojectedtoexpandby7.6percentin2022,acceleratingfrom7.0percentthepreviousyear,asCOVID-19vaccinationprogressesandcontact-intensivesectorsrecover.Despitetwoyearsofrobustgrowth,theprojectedrateofpercapitaincomecatch-upwithadvancedeconomiesfor2021-23hasslowedandisonlyabouthalftherateofcatch-upachievedinthedecadepriortothepandemic.Aresurgenceofthepandemic,especiallywiththeemergenceofOmicron,isakeyrisktotheoutlook.Otherdownsiderisksincludeinflat... SeeMore Outlook Highlights ChartsandData GlobalandRegionalOutlooks Sub-SaharanAfrica GrowthinSub-SaharanAfrica(SSA)reachedanestimated3.5percentin2021,supportedbyareboundincommoditypricesandagradualeasingofsocialrestrictions.Nevertheless,recurrentvirusflare-upsinseveralcountriesandlowvaccinationratesslowedthepaceoftherecovery.Growthisforecasttofirmto3.7percentayearonaveragein2022-23—somewhatabovelastJune’sprojectionsbutinsufficienttoreverseincreasesinpovertyandlossesinpercapitaincome.Slowprogresswithvaccinationsisexpectedtounderpinonlyagradualrecoveryofdomesticdemand,withsubstantialdownsideriskscloudingtheoutlook.Thefadingtailwindsfromcommodityprices,theunwindingofpolicysupport,andashifttoausterityinsomecountriestotacklerisingdebtlevelscouldslowgrowth.Amplifiedbythepandemic,previousweaknesses,suchasvulnerabilitiestoclimatechange,poverty,foodinsecurity,andviolence,weighheavilyonrecoveriesacrosstheregionaswell. SeeLess GrowthinSub-SaharanAfrica(SSA)reachedanestimated3.5percentin2021,supportedbyareboundincommoditypricesandagradualeasingofsocialrestrictions.Nevertheless,recurrentvirusflare-upsinseveralcountriesandlowvaccinationratesslowedthepaceoftherecovery.Growthisforecasttofirmto3.7percentayearonaveragein2022-23—somewhatabovelastJune’sprojectionsbutinsufficienttoreverseincreasesinpovertyandlossesinpercapitaincome.Slowprogresswithvaccinationsisexpectedtounderpinonlyagradualre... SeeMore Outlook Highlights ChartsandData ThreeTopicalIssues ResolvingHighDebtAfterthePandemic:LessonsfromPastEpisodesofDebtRelief Inthepandemic-inducedglobalrecessionof2020,globaldebtlevelssurged.Theriseindebthasledtoseveralcountriesinitiatingdebtrestructurings,whilemanyothersareinorathighriskofdebtdistressandmayalsoeventuallyneeddebtrelief.Historically,severalumbrellaframeworkscoordinateddebtrelieftomultipledebtorcountriesfrommultiplecreditorsoncommonprinciples.Theyofferedsubstantial—butprotracted—debtstockreductionsthatweretypicallyprecededbyaseriesoflessambitiousdebtreliefefforts.TheG20CommonFrameworkprovidesastructuretoinitiatedebtrestructuringforlow-incomeIDAeligiblecountries,butlargelyavoidstheissueofoutrightdebtreductions.Futureumbrellaframeworksfordebtrestructuringwillfacegreaterchallengesthanthoseinthepastduetoamorefragmentedcreditorbase. SeeLess Inthepandemic-inducedglobalrecessionof2020,globaldebtlevelssurged.Theriseindebthasledtoseveralcountriesinitiatingdebtrestructurings,whilemanyothersareinorathighriskofdebtdistressandmayalsoeventuallyneeddebtrelief.Historically,severalumbrellaframeworkscoordinateddebtrelieftomultipledebtorcountriesfrommultiplecreditorsoncommonprinciples.Theyofferedsubstantial—butprotracted—debtstockreductionsthatweretypicallyprecededbyaseriesoflessambitiousdebtreliefefforts.TheG20Comm... SeeMore Chapter Highlights Charts ThreeTopicalIssues ImpactofCovid-19onGlobalIncomeInequality TheCOVID-19pandemichasraisedglobalincomeinequality,partlyreversingthedeclinethatwasachievedovertheprevioustwodecades.Weakrecoveriesinemergingmarketanddevelopingeconomies(EMDEs)areexpectedtoreturnbetween-countryinequalitytothelevelsoftheearly2010s.Preliminaryevidencesuggeststhatthepandemichasalsocausedwithin-countryincomeinequalitytorisesomewhatinEMDEsbecauseofparticularlyseverejobandincomelossesamonglower-incomepopulationgroups.Overthemediumandlongterm,risinginflation,especiallyfoodpriceinflation,aswellaspandemic-relateddisruptionstoeducationmayfurtherraisewithin-countryinequality.Within-countryinequalityremainsparticularlyhighinEMDEregionsthataccountforabouttwo-thirdsoftheglobalextremepoor.Tosteertheglobalrecoveryontoamoreequitabledevelopmentpath,acomprehensivepackageofpoliciesisneeded.Arapidglobalrolloutofvaccinationandredoubledproductivity-enhancingreformscanhelplowerbetween-countryinequality.Supporttargetedatvulnerablepopulationsandmeasurestobroadenaccesstoeducation,healthcare,digitalservicesandinfrastructure,aswellasanemphasisonsupportivefiscalmeasures,canhelplowerwithin-countryinequality.Assistancefromtheglobalcommunityisessentialtoexpediteareturntoagreen,resilient,andinclusiverecovery. SeeLess TheCOVID-19pandemichasraisedglobalincomeinequality,partlyreversingthedeclinethatwasachievedovertheprevioustwodecades.Weakrecoveriesinemergingmarketanddevelopingeconomies(EMDEs)areexpectedtoreturnbetween-countryinequalitytothelevelsoftheearly2010s.Preliminaryevidencesuggeststhatthepandemichasalsocausedwithin-countryincomeinequalitytorisesomewhatinEMDEsbecauseofparticularlyseverejobandincomelossesamonglower-incomepopulationgroups.Overthemediumandlongterm,risinginflation... SeeMore Chapter Highlights Charts ThreeTopicalIssues CommodityPriceCycles:DriversandPolicies Commoditypricessoaredin2021followingthebroad-baseddeclineinearly2020,withpricesofseveralcommoditiesreachingall-timehighs.Inpart,thisreflectedthestrongreboundofdemandfromthe2020globalrecession.Energyandmetalpricesgenerallymoveinlinewithglobaleconomicactivity,andthistendencyhasstrengthenedinrecentdecades.Lookingahead,globalmacroeconomicdevelopmentsandcommoditysupplyfactorswilllikelycontinuetocauserecurringcommoditypriceswings.Formanycommodities,thesemaybeamplifiedbythetransitionawayfromfossilfuels.Todampentheassociatedmacroeconomicfluctuations,thealmosttwo-thirdsofemergingmarketanddevelopingeconomies(EMDEs)thatarecommodityexportersneedtostrengthentheirpolicyframeworksandreducetheirrelianceoncommodity-relatedrevenuesbydiversifyingexportsand,moreimportantly,nationalassetportfolios. SeeLess Commoditypricessoaredin2021followingthebroad-baseddeclineinearly2020,withpricesofseveralcommoditiesreachingall-timehighs.Inpart,thisreflectedthestrongreboundofdemandfromthe2020globalrecession.Energyandmetalpricesgenerallymoveinlinewithglobaleconomicactivity,andthistendencyhasstrengthenedinrecentdecades.Lookingahead,globalmacroeconomicdevelopmentsandcommoditysupplyfactorswilllikelycontinuetocauserecurringcommoditypriceswings.Formanycommodities,thesemaybeamplifiedbyth... 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