A recovery is underway, but the economic fallout from the global pandemic could be with us for years to come.
With the crisis exacerbating prepandemic vulnerabilities, country prospects are diverging. Nearly half of emerging market and developing economies and some middle-income countries are now at risk of falling further behind, undoing much of the progress made toward achieving the UN Sustainable Development Goals. Within countries, inequality is on the rise as well; workers with fewer skills, youth, women, and those informally employed are suffering disproportionate income losses.
Sustaining the recovery will require an ongoing policy push, including to secure and expand access to vaccines and to maintain economic lifelines and targeted policy support, tailored to the stage of the pandemic, the strength of the economic recovery, and countries’ structural characteristics. Multilateral cooperation will be vital to ensure all countries have equitable access to vaccines and financially constrained economies have adequate access to international liquidity.
As the recovery progresses, economic reforms and public investments in human capital and green and digital infrastructure should be scaled up to facilitate resource reallocation and limit long-term scarring. By building toward a more inclusive, digital, and green future, the world’s economies can achieve higher and more durable growth.