The world is currently facing a major economic crisis that hasn’t been seen since the Great Depression. Two global events have triggered this crisis: the COVID-19 pandemic and ongoing wars.
The pandemic has caused a deep recession in the world economy that is three times worse than the 2008 financial crisis. This has led to a significant decline in global GDP, impacting all countries. Unemployment rates have surged across major economies, with millions of workers put on government-supported job retention schemes. Almost 700 million people are now living in extreme poverty, an increase of roughly 100 million.
The ongoing wars have only made things worse by increasing commodity prices and broadening price pressures. The 2022 inflation projections are 5.7 percent in advanced economies and 8.7 percent in emerging market and developing economies. The wars have also caused a severe double-digit drop in GDP in the affected countries. The economic costs of war are expected to spread farther afield through commodity markets, trade, and financial interlinkages.
The global growth is projected to slow from an estimated 6.1 percent in 2021 to 3.6 percent in 2022 and 2023. Beyond 2023, global growth is forecast to decline to about 3.3 percent over the medium term. Developing countries are expected to be hit harder than wealthier nations, with Africa and Latin America and the Caribbean projected to see significantly lower growth compared to pre-pandemic projections. This will lead to more poverty and less progress on sustainable development and climate action. The pandemic and wars have created an unprecedented global economic crisis.
To navigate this crisis, multilateral efforts are needed to respond to the humanitarian crisis, prevent further economic fragmentation, maintain global liquidity, manage debt distress, tackle climate change, and end the pandemic. We need to come together as a world to build a more resilient and sustainable global economy.
source:oecd.org, weforum.org, bbc.com, news.un.org, global.ilmanifesto.it, channelnewsasia.com, msn.com, bloomberg.com, imf.org