Global outlook c h a p t e r 1

A. Reversals of EMDE per capita 
income gains in 2020, by number of 
years
B. GDP in EMDEs
C. Investment gaps with pre-pandemic 
levels
D. Impact of COVID-19 on
learning-adjusted years of schooling
magnifies the impact of the global recession on 
poverty, with even modest increases in inequality 
indicators associated with tens of millions more 
people falling below the international poverty line 
(Lakner et al. 2020). The longer-term impacts of 
disruptions to schooling, which have been more 
prolonged in EMDEs and LICs, are also likely to 
particularly affect those populations with limited 
access to infrastructure and technology, such as 
the internet or personal computers, and leave 
more lasting scars (figures 1.13.B and 1.13.C; 
chapter 3; Azevedo et al. 2020; Copley et al. 
2020).
Although EMDE per capita incomes are expected 
to begin to recover in 2021-22 as activity 
gradually picks up, they are expected to remain 
well below pre-pandemic projections (figure 
1.13.D). In over one-half of EMDEs, five or more 
years of per capita incomes gains have been lost, 
while in more than one-quarter of economies—
many of which are clustered in Latin America and 
the Caribbean (LAC), the Middle East and North 
Africa (MENA), and SSA—all progress made over 
the 2010s has been erased. In all, per capita GDP 
levels are projected to be lower in 2022 than in 
2019 for about two-thirds of EMDEs. 
Global outlook and risks
Although global activity is projected to recover as the 
pandemic is gradually brought under control, it is not 
expected to return to its pre-crisis trend. The baseline 
forecast is subject to several risks. The spread of the 
pandemic could accelerate, particularly if the 
vaccination process is delayed, and economic 
weakness and impaired banking systems may lead to 
financial crises. In the medium term, the crisis may 
lower global potential output as a result of lasting 
damage to health, education, and balance sheets. 
Declining global cooperation may lead to greater 
uncertainty and less effective policy actions.
Global outlook
Global activity is estimated to have contracted 4.3 
percent in 2020 as a result of COVID-19, making 
it the fourth most severe global recession of the 
past 150 years, exceeded only by the first World 
War, the Great Depression, and the Second 
World War. Given the unprecedented nature of 
the pandemic, prospects for the global economy 
are uncertain, and several growth outcomes are 
possible. In the baseline forecast, global growth is 
expected at 4 percent in 2021, and is projected to 

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