The World Bank has said it expects a continuous rise in Covid-19 infections in addition to a delayed rollout of vaccines to reduce global economic growth to 1.6 per cent this year.
This is according to the Bank’s January 2021 Global Economic Prospects Report.
The Bretton Wood Institution in its report said global economy growth is projected to be 4 per cent this year.
The projected economic growth, the Bretton Wood institution notes, is based on the assumption that an initial COVID-19 vaccine rollout becomes widespread across the globe throughout the year.
The World Bank however, warned that the projected 4 per cent recovery growth is likely to be subdued unless policy makers around the world move decisively to tame the pandemic and implement investment-enhancing reforms as it expects the pandemic to depress economic activity and incomes for a prolonged period.
In the case of Ghana, the country’s growth projection has been revised to 1.9 per cent from a previous 4 per cent growth for this year by the World Bank.
The reason given for the downward revision of the nation’s growth rate by the Bank is that, the country’s resilient agricultural sector will not be able to sufficiently offset the lingering adverse impact of the covid-19 pandemic on other sectors of the economy.
“In Ghana—the region’s fourth largest economy—the expected resilience in agriculture will not be sufficient to offset the pandemic’s lingering adverse impact on oil and other sectors. As a result, the growth forecast for 2021-22 has been downgraded to 1.9 per cent,” said the report.
According to the World Bank, growth in Sub-Saharan Africa is expected to rebound only moderately to 2.7 per cent in 2021— 0.4 percentage point weaker than previously projected — before firming to 3.3 per cent in 2022.
The sluggish recovery, the multilateral institution notes, reflects persistent outbreaks in several African economies that have inhibited the resumption of economic activity, particularly in the services sectors such as tourism.
According to the World Bank, the U.S. economy is forecasted to expand by 3.5 per cent in 2021, after an estimated 3.6 per cent contraction in 2020. In the Euro area, output is anticipated to grow 3.6 per cent this year, following a 7.4 per cent decline in 2020.
China’s economy is expected to expand by 7.9 per cent in 2021 following a 2 per cent growth last year. Excluding China, emerging market and developing economies are forecast to expand 3.4 per cent in 2021 after a contraction of 5 per cent in 2020. Among low-income economies, activity is projected to increase 3.3 per cent in 2021, after a contraction of 0.9 per cent in 2020.
Meanwhile, a successful control of Covid-19 infections and a faster vaccination process the World Bank notes, will result in the acceleration of global growth to nearly 5 per cent for this year.
The Bank however, noted that due to uncertainties surrounding infections and deployment of the vaccines, different growth outcomes for the global economy are possible.
“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 per cent in 2021. Meanwhile, in an upside scenario with successful pandemic control and a faster vaccination process, global growth could accelerate to nearly 5 percent,” read the report.
