In 2021, the world economy made a smart recovery over the pandemic-hit 2020. But hopes of a spring have been short-lived. Instead of vaccines making coronavirus a history, there’ve been new variants, making full recovery uncertain. A World Bank report makes a grim prognosis this week: We are heading for a slowdown this year and the next.

>‘Global Economic Prospects’
https://www.worldbank.org/en/publication/global-economic-prospects

https://blogs.worldbank.org/voices/global-economic-outlook-five-charts-1

(Meanwhile, the IMF has delayed its global growth forecasts from January 19, warning further downgrades.)

The WB report’s central message is ‘Slowing Growth, Rising Risks.’ It says global growth can decelerate from 5.5% in 2021 to 4.1% in 2022 and 3.2% in 2023, reflecting continued Covid-19 flare-ups, diminished fiscal support, and lingering supply bottlenecks. We could be in for the sharpest slowdown since at least the 1970s: https://www.washingtonpost.com//world/2022/01/12/global-economy-pandemic-inequality/

The headwinds, in short, are: *Omicron *Nations are running debts to fund vaccines and fight Covid-19 instead of fuelling economies *Supply chain disruptions of 2021 continue *So energy and food prices are up: https://www.aljazeera.com/economy/2022/1/11/world-bank-warns-of-slowing-global-growth-widening-inequality

Developed countries can hope to be back on track by 2023, but the developing countries may take a while to recover.

Vaccine inequalities are adding to economic woes too. There’s another “pandemic of inequality” the World Bank talks of – the wealth gap among nations and also inside nations is set to worsen to levels not seen in a generation. It’s going to be especially harsh for the poor in the less-income nations, affecting education, healthcare and food security.

Another report this week, from the World Economic Forum (WEF), highlights the risks emerging from this sad reality that we are already witnessing in Kazakhstan, with violent protests against inflation.

>Global Risk Report:
https://www.weforum.org/reports/global-risks-report-2022

“The resulting global divergence will create tensions — within and across borders — that risk worsening the pandemic’s cascading impacts,” it warns. Societal and environmental risks have worsened the most since the start of the pandemic, the WEF report notes, with “social cohesion erosion” and “livelihood crises” taking the top spots: https://www.npr.org/2022/01/11/1072029936/cyber-risks-add-to-climate-threat-world-economic-forum-warns

Also read:

*Omicron may be less severe than the delta variant, but it could hit the global economy harder: https://fortune.com/2022/01/10/omicron-covid-delta-economic-impact-stocks-growth-unemployment/

*The unpredictable pandemic has made forecasting far harder: https://www.washingtonpost.com/business/2022/01/11/jobs-pandemic-shepherdson-omicron/