One year has passed since the epidemic. Many people are still dying and billions of people are carrying the curse of unemployment. Social and economic pressures are still strong. Nevertheless, the way out of this predicament is gradually becoming visible in front of us. We feel the same way now as we do when we see distant sailors in the deep sea and the trees of the island in the distance..
Thanks to scientists, millions of people are getting vaccinated for their welfare. The economy is also adapting in many ways. The speed of recovery seems to be higher than expected. In the latest economic forecast of the IMF, we have shown that the growth rate of the world economy will stand at 6 percent this year. In 2022, it will stand at 4.4 percent.
But there is no reason to think that we have overcome all the challenges. The virus is emerging in a stronger form in many countries, many countries are not yet vaccinated, so the recovery process will not be the same everywhere. Even in one country, the recovery of all sectors is not happening at the same pace. Countries with low immunization rates, weak economic support, and those that rely heavily on tourism are lagging behind in recovery.
The main driving force behind the positive forecast we have given this year is not the developing countries, but the developed countries. In the United States in particular, new President Joe Biden’s 1.9 trillion USD incentive package could boost the country’s growth rate to 7.4 percent this year. Among the developed countries, however, the growth rate of the euro area will not be so high. On the other hand, among the emerging and developing countries, China will do well this year. Their growth rate can stand at 6.4 percent. Although China’s growth rate has already returned to pre-epidemic levels, it will take 2023 for emerging economies to return to that place.
In those country where there is so much gap, the inevitable result is that the lives of the people in all these countries will be greatly affected. Compared to the pro-epidemic projection, the per capita GDP decline in low-middle-income countries will be 5.7 percent and in emerging countries 2.3 percent. This will tarnish the success of poverty alleviation. Compared to the pre-epidemic projection, 95 million more people will fall into extreme poverty.
This is the international situation in the country, now it is seen that the gap is also increasing inside the country. Young and low-skilled workers in particular are being hit harder than others. Women are also being harmed, especially in emerging and developing countries.
Meanwhile, the ongoing digitization process has gained momentum due to the epidemic. What’s more, jobs that have already passed from human hands to machines will be less likely to return. Then the workers of one sector will have to go to another sector. They need to master new skills. This will reduce the income of many.
However, the way the whole world has responded to this epidemic in principle, the damage has been avoided. Overall, the governments of different countries have stood by the people with 16 trillion in revenue assistance. Our calculations are that without this assistance, the losses would have tripled last year.
The financial crisis has been avoided in this process. The medium-term losses will be lower than in the 2008 global financial crisis. Although the developed countries of the service have suffered the most, this time the emerging and developing countries have suffered the most.
However, our prediction is not entirely thorny. There is a great deal of uncertainty surrounding our predictions. However, it is to be hoped that our prognosis graph will go up further if vaccinations are given quickly. But the fear is that new variants of the virus are reported to be bypassing the ticker antibodies, which could prolong the epidemic, as well as lower the graph. In addition, rising interest rates in the United States can lead to a variety of financial risks. This can increase the value of resources and create a chaotic environment. Tensions in the financial sector could disrupt the financing process. The recovery process will lose speed. This is especially true in the context of highly assisted emerging markets and developing countries.