The World Bank Group President, David Malpass, has said at the 2020 Annual Meetings Plenary that the global economy is expected to partly recover in 2021 from its worst recession since World War II.
He suggested that there is the need to redouble efforts to alleviate poverty and inequality.
Covid-19 has dealt an unprecedented setback to the global efforts to end extreme poverty, raise median incomes, and create shared prosperity, he noted.
“The global economy is expected to partly recover in 2021 from its worst recession since World War II. Although it is growing again, global activity is expected to remain well below its pre-pandemic trend for a prolonged period. Developments thus far point to shallower recessions in advanced economies and a more robust rebound in China than previous estimates.
“However, in the majority of other emerging and developing economies, the recessions in 2020 have turned out to be much deeper—and recoveries have been more delayed—than June estimates, largely reflecting more damaging economic disruptions from the pandemic,” Mr David Malpass said.
The World Bank’s new poverty projections suggest that by 2021 an additional 110 to 150 million people will have fallen into extreme poverty, living on less than $1.90 per day.
Covid-19 and its associated economic crisis, compounded by the effects of armed conflict and climate changes, are reversing hard-won gains in poverty reduction, ending more than two decades of continuous progress.
“Poverty is expected to rise in 2020 for the first time since 1998. It’s clear that we face a unique pandemic of inequality: the downturn is broader and deeper, and it has hit informal sector workers and the poor—especially women and children—the hardest.
“The World Bank Group took broad, fast action early, and we provided large net positive flows to the world’s poorest countries. We are making good progress toward our announced 15-month target of $160 billion in surge financing, much of it to the poorest countries.
“Over $50 billion of that is in the form of grants or low-rate, long-maturity loans—providing key resources to maintain or expand health care systems and social safety nets. Thanks to the generous support of IDA donors to IDA-19 in December, and to the completion of the IBRD and IFC capital increase packages in March, this size of response is consistent with the financial sustainability frameworks agreed for our institutions,” he said,.
By Laud Nartey|3news.com|Ghana with additional files from World Bank