The global economy is expected to grow by four per cent in 2021, as the initial COVID-19 vaccine rollout becomes widespread in the course of the year.
The World Bank made the prediction in its ‘January 2021 Global Economic Prospects’ released on Tuesday.
The bank also forecast growth in sub-Saharan Africa to rebound moderately to 2.7 per cent, growth in Nigeria to resume at 1.1 per cent.
“Expectations of a sluggish recovery in sub-Saharan Africa reflect persistent COVID-19 outbreaks in several economies that have inhibited the resumption of economic activity.
“The pandemic is projected to cause per capita incomes to decline by 0.2 per cent this year, setting Sustainable Development Goals further out of reach in many countries in the region.
“This reversal is expected to push tens of millions more people into extreme poverty over last year and this year,” it stated.
According to the bank, activities in Nigeria are expected to be dampened by low oil prices, reduced oil quotas, falling public investment, constrained private investment, and subdued foreign investor confidence.
It, however, raised the hope that the rebound in Africa was expected to be slightly stronger, though below historical averages among agricultural commodity exporters.
Commenting, World Bank’s President, David Malpass, said, “To overcome the impacts of the pandemic and counter the investment headwind, there needs to be a major push to improve business environments, increase labour and product market flexibility and strengthen transparency and governance.”
The bank stated further that the near-term outlook remained highly uncertain and different growth outcomes were still possible, and that in a downside scenario in which infections continued to rise and the roll-out of a vaccine delayed, it could limit the global expansion to 1.6 per cent.
“It is likely to worsen the slowdown in global growth projected over the next decade due to underinvestment, underemployment, and labour force declines in many advanced economies.
“If history is any guide, the global economy is heading for a decade of growth disappointments unless policymakers put in place comprehensive reforms to improve the fundamental drivers of equitable and sustainable economic growth.
“Policymakers need to continue to sustain the recovery, gradually shifting from income support to growth-enhancing policies,” it added.
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