You are currently viewing World Economic Forum publishes pandemic recovery forecast

12 Jan. 2022 22:55

A new study by the World Economic Forum warns it could take years to overcome the effects of the COVID-19 pandemic. In addition, in the face of economic imbalances, concerns about the future of the global business elite are becoming clear.

In the new Global Risks Report published by the World Economic Forum (WEF) on Tuesday, it says:

“COVID-19 and its economic and social consequences continue to pose a critical threat to the world. Inequality and the resulting unequal economic upturn threaten to exacerbate social rifts and geopolitical tensions.”

The report is based on the opinions of nearly 1,000 risk professionals and executives from around the world in business, public service, government and academia.

The study’s authors call on nations to unite against the “divergence” resulting from unequal vaccination rates in richer and poorer countries, with the latter facing stronger economic hurdles and a longer recovery period.

In Ethiopia and Nigeria, for example, less than three percent of the population is fully vaccinated against COVID-19, figures from Our World in Data show. In the United States, however, it is 62 percent of citizens and in the United Arab Emirates and Portugal almost 90 percent who have received at least two vaccinations. Given this situation, the authors warn:

“The resulting global divergences will create tensions – within and across borders – that could exacerbate the cascading effects of the pandemic and make the coordination necessary to address shared challenges difficult.”

Many economists point out that one of the worst effects of the pandemic – aside from the death toll – is the rise in economic inequality as people around the world struggle with unsafe jobs or educational problems. The report does not ignore existing concerns about the pace of global economic recovery:

“Although employment in many advanced economies is approaching pre-pandemic levels, post-COVID-19 employment recovery is lagging behind economic recovery around the world.”

“Young people, women and low-skilled workers are particularly affected. It will take the global economy until at least 2023 to recreate the jobs lost as a result of COVID-19.”

The majority of respondents agree that pandemic-induced economic stagnation remains the most serious problem. In addition, the economic impact would continue to affect countries’ ability to control the spread of the virus and enable sustainable recovery. The authors note:

“The macroeconomic outlook remains weak and the global economy is expected to be 2.3 percent smaller by 2024 than it would have been without the pandemic.”

Overall, only 16 percent of respondents are optimistic about the outlook for the world, while only 11 percent believe the global recovery will accelerate. The report goes on to say:

“Instead, most respondents expect the next three years to be marked by either persistent volatility and numerous surprises, or a rift in development that will separate relative winners and losers.”

Surprisingly, however, the majority of the experts questioned in the study did not characterize the economic problems as the greatest global risk for the years to come. In the list of the greatest risks for the coming years, “livelihood crises” came fifth, “debt crises” and “geo-economic confrontation” came ninth and tenth, respectively. Politicians and business people seemed more concerned about the climate, with “failures to take climate action” ranked number one on the list of global risks.

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However, views differ from country to country. While most European experts are concerned about the climate, respondents from Australia, the UK and New Zealand are worried about cybersecurity. The Japanese experts cite “persistent economic stagnation” as their greatest concern, while the experts from the USA and South Korea call it “asset bubbles”. Experts in India are particularly concerned about the “break in interstate relations”, and participants from China cite “extreme weather events” as their main concern.

The World Economic Forum usually publishes its annual risk report before the Davos summit of the world business elite. However, this year’s meeting was recently postponed due to the pandemic – for the second year in a row.

more on the subject – Meeting of the World Economic Forum in Davos canceled due to Omikron

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