Global Economic Update
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The United Nations warned that developing economies might be left behind by the rapid growth of developed countries, and there was talk of a “post-Covid” world that would distract policymakers from continuing to support poorer countries, many of which still lack vaccines.
The United Nations Conference on Trade and Development stated in a report on Wednesday: “The biggest risk facing the global economy is that the rebound in the North will divert people’s attention from the long-term needed reforms, otherwise developing countries will continue to be in a weak and vulnerable position. .”.
A pandemic is usually regarded as a Chance “Rebuild better” and rethink the principles of international economic governance. But the report warns that after the global financial crisis, the possibility of this happening will disappear again.
In its 2021 Trade and Development ReportUNCTAD stated that policymakers in advanced economies have not yet realized the scale or continuity of the shocks in developing countries.
Richard Kozul-Wright, Director of UNCTAD’s Division of Globalization and Development Strategies, said: “One thing that surprised me is the lack of awareness of the damage this epidemic is causing to developing countries. “
Although advanced economies “are already talking about the post-Covid world… In most developing countries, this is a completely inappropriate description of where we are now, especially in stark contrast to talk about rebuilding better. “
UNCTAD predicts that the global economy will grow by 5.3% this year and slow to 3.6% by 2022, but the recovery will be extremely uneven.
The United States is expected to grow by 5.7% this year, and China will grow by 8.3%. On average, Latin American and Caribbean countries are expected to grow by 5.5% this year. However, the average growth rate in sub-Saharan Africa this year is expected to be only 2.5%, while the average growth rate in Southeast Asia is 3.5%.
Based on the 2017-19 growth trajectory, UNCTAD estimates that by 2025, developing countries will be poorer by US$12 trillion than they would have been without a pandemic.
The report welcomed the US$650 billion Special Drawing Rights allocated by the International Monetary Fund, but said Need to do more work Solve the financial pressure, debt burden and lack of vaccines in many developing countries.
UNCTAD Secretary-General Rebecca Greenspan said: “These widening domestic and international gaps remind people that if basic conditions are maintained, fewer and fewer privileged people will enjoy flexibility and growth luxury.”
The report urges coordinated debt relief and, in some cases, debt cancellation; reassess the role of fiscal policy in the global economy; strengthen policy coordination among systemically important economies; and support the deployment of vaccines in developing countries. “Bold” support, including the abandonment of intellectual property rights to speed up manufacturing and supply.