The World Bank Group issued a guarded growth forecast for the global economy this year, saying that a four percent overall expansion was likely, although the recovery will likely be a “subdued” one.
Policy makers must move decisively, according to January’s Global Economic Prospects, and although it is already growing again following the 4.3 percent contraction of 2020, the Covid-19 pandemic has caused “a heavy toll of deaths and illness, plunged millions into poverty, and may depress economic activity and incomes for a prolonged period.”
Immediate policy priorities should now focus on controlling the spread of coronavirus and ensuring rapid and widespread vaccine deployment.
“To support economic recovery, authorities also need to facilitate a reinvestment cycle aimed at sustainable growth that is less dependent on government debt,” the Bank advises.
“While the global economy appears to have entered a subdued recovery, policymakers face formidable challenges — in public health, debt management, budget policies, central banking and structural reforms — as they try to ensure that this still fragile global recovery gains traction and sets a foundation for robust growth,” said World Bank Group president David Malpass.
“To overcome the impacts of the pandemic and counter the investment headwind, there needs to be a major push to improve business environments, increase labor and product market flexibility, and strengthen transparency and governance.”