C H A P T E R 1
G L O B A L E C O N O M I C P R O S P E C T S | J A N U A R Y 2 0 2 1
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procure sufficient
quantities of
vaccines,
absent coordinated
international support.
The recovery among fragile and conflict-affected LICs is
projected to be sluggish, with growth resuming at 2.4
percent in 2021, before firming to 4 percent in 2022.
Despite the pickup in growth, activity in these economies
in 2022 would remain 5.6 percent below its pre-pandemic
binding logistical hurdles than other EMDEs in the
effective nationwide distribution of vaccines. These
include lacking infrastructure such as transport networks
and reliable cold chains to distribute temperature-sensitive
vaccines, weak health systems, and limited state capacities
(Guignard et al. 2019; Kartoglu and Milstien 2014; World
Bank 2020g). Moreover, severe fiscal space constraints
mean that many LICs will likely also have limited scope to
BOX 1.2
Recent developments and outlook for low-income countries
(continued)
A. Level of LIC activity relative to
pre-pandemic trend
B. Growth per capita
C. Poverty headcounts in LICs
D. Debt service costs in LICs, by risk of
debt stress
FIGURE B1.2.2
Outlook and risks
Despite the projected pickup in LIC growth in 2021-22, activity is projected to remain well below its pre-pandemic trend,
especially among fragile and conflict-affected LICs. After falling sharply last year, per capita incomes are projected to edge
up in 2021-22—but the rebound is envisioned to be smaller in fragile and conflict-affected LICs. The steep deterioration in
living standards is set to push many millions of people into extreme poverty. Rising debt servicing costs, along with severely
constrained fiscal space, may raise debt sustainability concerns. Growing insecurity and frequent natural disasters pose
additional risks.
Sources:
Armed Conflict Location & Event Data Project (ACLED), https://www.acleddata.com; EM-DAT (database); International Monetary Fund; Lakner et al. (2021);
World Bank; World Bank (2020m).
Note
: Shaded area indicates forecasts. AEs = advanced economies; LICs = low-income countries; Fragile LICs = fragile and conflict-affected LICs.
A. Pre-pandemic trend corresponds to January 2020 forecasts in the
Global Economic Prospects
report.
B. Aggregate growth rates calculated using GDP weights at 2010 prices and market exchange rates. Aggregate per capita growth rates calculated using the total GDP
for each subgroup divided by its total population.
C. Lower (upper) edge of the shaded area reflects the baseline (downside) projection for the impact of the pandemic on poverty headcounts and rates in LICs.
D. Aggregates represent the estimated amount of interest and principal due on total sovereign debt in 2020 and 2021 as a share of 2019 nominal GDP.
E. Number of acts of violence against civilians. Last observation is December 12, 2020.
F. Average number of natural disaster episodes per country per year, by income group (Dieppe 2020).
Click here to download data and charts.
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