GLOBAL ECONOMY
It is going to be a long & uneven road to Economic recovery
4 Charts showing the steep path ahead for the global economy as roadblocks mount
As COVID-19 continues to spread unabated globally, the signs of psychological & economic fatigue are showing up with the continued social restrictions. The euphoria around the economic stimulus provided by the governments after the first wave is waning as many countries battle a bigger second wave. Low & middle-income countries are facing an even more challenging time with their limited fiscal capacity.
A swift recovery to normalcy on health & economic fronts looks increasingly unlikely and an uphill task at best. With over 38 million infected and close to 1.1 million fatalities, stiff challenges lie ahead. Some pundits point to the fact that the labor market continues to struggle — although temporary unemployment is coming down as more and more parts of the economy reopen, permanent unemployment continues to rise.
Reading between the lines of data, it paints a grim picture. The polarization in the labor market has caused low-income workers, youth, and women to be harder hit. The starkest of them all is the widening gap between the rich & poor — 90 million people expected to fall into extreme deprivation this year alone.
“This is the worst crisis since the Great Depression, and it will take significant innovation on the policy front, at both the national and international levels to recover from this calamity.” ~ IMF Blog
According to the latest World Economic Outlook, the IMF continues to project a deep recession in 2020, as countries struggle with a balancing act between reviving the economy and controlling the pandemic. First, let’s take a look at the growth projections (Figure 1) for different regions, followed by four charts depicting the uphill task of global economic recovery.
