Mettis Global News
Mettis Global News
Mettis Global News
Mettis Global News

Trending :

EMs to feel debt load long after virus abates: World Bank

Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp

December 31, 2021 (MLN): Debt burden in Emerging Markets (EMs) and developing economies will be felt long after the virus abates, as servicing costs rise, slowing recoveries and hindering efforts to address other development challenges, said a report issued by World Bank on Friday.

The challenge is acute in low-income countries– half of which were in debt distress or at high risk of debt distress before COVID-19 arrived. This comes after a decade that saw the fastest, biggest, and broadest expansion of debt levels around the world, the report said.

From uneven economic recovery to unequal access to vaccines; from widening income losses to divergence in learning, COVID-19 has had a disproportionate impact on the poor and vulnerable in 2021.

It is causing reversals in development and is dealing a setback to efforts to end extreme poverty and reduce inequality.

Because of the pandemic, extreme poverty rose in 2020 for the first time in over 20 years and around 100 million more people are living on less than $1.90 a day. Through this series of charts and graphs, we share select research from the World Bank Group that illustrates the severity of the pandemic as it enters its third year, it added.

With regard to the unequal vaccine access, the report stated, “with just over 7 percent of people in low-income countries receiving a dose of the vaccines compared to over 75 percent in high-income countries.”

The World Bank has approved financing for vaccine purchase and deployment in over 64 countries, amounting to $6.3 billion. So far, almost 300 million COVID vaccine doses are under Bank contracts for developing countries.

As is the case with access to vaccines, there is an emerging gap in the economic recovery between high-income and low- and middle-income economies.

While the global economy is set to expand 5.6 percent in 2021—its strongest post-recession pace in 80 years, the recovery will be uneven. Low-income economies are forecast to expand by only 2.9 percent in 2021, the slowest growth in the past 20 years, other than 2020, partly due to the slow pace of vaccination, the report underlined.

Discussing the energy prices, the bank says, “The picture of commodity prices isn’t rosy either. Energy prices are expected to average more than 80 percent higher in 2021 compared to the previous year.

However, in the latter half of 2021, food commodity prices have begun to stabilize in response to favorable global supply outlook, but they are still above pre-pandemic levels.

Moreover, domestic food price inflation is rising in most countries, reducing poor people’s ability to afford healthy food. This can exacerbate food insecurity in developing countries.

Bottom line:

2021 has shown that the impact of the pandemic is far-reaching and has touched every possible area of development. With the poor and the vulnerable bearing the brunt of it, the pandemic is dealing a severe setback to ending poverty and boosting shared prosperity. But it isn’t all doom and gloom.

As the year went on, there were some positive developments — the global economy grew, goods trade rebounded, food commodity prices have begun to stabilize, and remittances registered a robust recovery.  However, with newer variants and unequal access to vaccines, there is still more work to be done, it added.

Copyright Mettis Link News

 

Posted on: 2021-12-31T15:24:07+05:00

29890