THE TIMES ARE A-CHANGIN'…

THOUGH STRONG, THE GLOBAL RECOVERY REMAINS UNEVEN AND INCOMPLETE, AND 2022 BRINGS MANY NEW CHALLENGES

- JAHANGIR AZIZ

It’s now been nearly two years since the pandemic began, and we are still not out of the woods. The Omicron variant is still spreading and the Delta wave is not yet over. But this is not 2020. Unlike then, we today have several vaccines and at least two therapeutic drugs in production and others in the pipeline. While vaccination rates differ widely across the world, the days of lockdowns and other extreme forms of social distancing are likely behind us. As such, we expect the strong global economic recovery underway to continue, perhaps with a few stumbles.

In 2021, the global economy is likely to have grown around 5.8 per cent, up from the -3.3 per cent registered in 2020. For 2022, we expect an above-trend growth rate of 4.3 per cent. But the recovery will remain uneven and incomplete. Developed economies have recovered more strongly than emerging and developing economies, where the recovery will remain incomplete compared to the prepandemic path even by end-2022. This should not be surprising. The pandemic was primarily a public-health crisis that required strong fiscal support to mitigate the economic fallout. Developed economies have much better public-health ecosystems and more fiscal space than others. These differences are showing up in the uneven pace and completeness of the recovery.