The global economy is expected to expand 4% in 2021. The sub-regional economy of Eastern Europe is projected to rise to a tepid 1.3% this year, Orient news outlet reported on Wednesday with reference to the World Bank report.
In its latest Global Economic Prospects report issued on Tuesday, the World Bank said the pandemic and its containment measures have had a serious negative impact on the global economy. Last year the global economy decreased by 4.3%.
“Fiscal support packages have been announced in nearly all Europe and Central Asia economies. Despite these and other support measures, the pandemic is estimated to have triggered millions of job losses in the first three quarters of last year in Europe,” the World Bank said in its report. “Increases in the number of unemployed were particularly pronounced in Central Europe and Russia.”
According to the document, the collapse in global economic activity in 2020 is estimated to have been slightly less severe than previously projected, mainly due to shallower contractions in advanced economies and a more robust recovery in China. In contrast, disruptions to activity in the majority of other emerging market and developing economies were more acute than expected.
The bank noted that the recovery of the global economy this year will largely depend on the successful and rapid implementation of the COVID-19 vaccination campaign, which will help bring the dangerous virus under control.
“To overcome the impacts of the pandemic and counter the investment headwind, there needs to be a major push to improve business environments, increase labor and product market flexibility, and strengthen transparency and governance,” World Bank Group President David Malpass said.
The near-term outlook remains highly uncertain, and different growth outcomes are still possible, as a section of the report details. A downside scenario in which infections continue to rise and the rollout of a vaccine is delayed could limit the global expansion to 1.6% in 2021. Meanwhile, in an upside scenario with successful pandemic control and a faster vaccination process, global growth could accelerate to nearly 5%.