Global outlook c h a p t e r 1

East Asia and Pacific.
Regional growth slowed to an 
estimated 0.9 percent in 2021—the lowest rate since 
1967—and is projected to expand 7.4 percent in 2021. 
Even by 2022, the level of activity is forecast to be more 
than 3 percent below pre-pandemic projections. Whereas 
China is expected to recover strongly, the rest of the region 
is only expected to return to a level around 7.5 percent 
below pre-pandemic projections in 2022, with significant 
cross-country differences. Key downside risks to the 
outlook include heightened financial stress amplified by 
elevated debt levels, and persistent policy uncertainty and 
subdued investment amid lingering trade tensions.

Europe and Central Asia. 
Activity in the region is 
estimated to have fallen by 2.9 percent in 2020. Due to a 
resurgence of COVID-19, the pace of recovery in 2021 is 
projected to be slower than originally anticipated, at 3.3 
percent. Growth is projected to accelerate to 3.9 percent in 
2022 as the effects of the pandemic gradually wane and the 
recovery in trade and investment gathers momentum. The 
pandemic is expected to erase at least five years of per 
capita income gains in about a fifth of the region’s 
economies. Economies with strong trade or financial 
linkages to the euro area and those heavily dependent on 
services and tourism have been hardest hit. The outlook 
remains highly uncertain, however, and growth could be 
weaker than expected if external financing conditions 
tighten, or if geopolitical tensions escalate. 
Latin America and the Caribbean.
Pandemic-control 
measures, risk aversion by households and firms, and 
spillovers from a shrinking global economy resulted in the 
region’s economy contracting by an estimated 6.9 percent 
BOX 1.3 
Regional perspectives: Recent developments and outlook 
 
The pandemic has exacted substantial costs on all emerging market and developing economy (EMDE) regions. Although all 
regions are expected to grow this year, the pace of the recovery varies considerably, with greater weakness in countries that have 
larger outbreaks or greater exposure to global spillovers through tourism and industrial commodity exports. The East Asia and 
Pacific region is envisioned to show notable strength in 2021 due to a solid rebound in China, whereas activity is projected to be 
weakest in the Middle East and North Africa and Sub-Saharan Africa regions. Many countries are expected to lose a decade or 
more of per capita income gains. Risks to the outlook are tilted to the downside. In addition to region-specific risks, all regions are 
vulnerable to renewed outbreaks and logistical impediments to the distribution of effective vaccines, financial stress amid elevated 
debt levels, and the possibility that the impact of the pandemic on growth and incomes may be worse than expected over the 
longer term. In a downside scenario of a more severe and prolonged pandemic, the lowest growth rates among the six EMDE 
regions would be in Latin America and the Caribbean, the Middle East and North Africa, and Sub-Saharan Africa, reflecting 
these regions’ reliance on exports of oil and industrial commodities, the prices of which would be reduced by weak global demand. 
Note: This box was prepared by Patrick Kirby with contributions 
from Cedric Okou, Franz Ulrich Ruch, Rudi Steinbach, Ekaterine 
Vashakmadze, Dana Vorisek, and Collette Wheeler. Research assistance 
was provided by Maria Hazel Macadangdang.

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