Global economic recovery facing headwinds: UN

Source: Global economic recovery facing headwinds: UN – NewsDay Zimbabwe

BY LORRAINE MUROMO/METHEMBE SIBANDA
THE United Nations (UN) has warned that global economic recovery will be difficult this year amid fears that most countries will experience high inflation rates, which will cause loss of jobs in the near future.

In a recent report, the UN said the global economic recovery was facing significant headwinds amid new waves of COVID-19 infections, persistent labour market challenges, lingering supply-chain challenges and rising inflationary pressures.

“After expanding by 5,5% in 2021, the global output is projected to grow by only 4,0% in 2022 and 3,5 % in 2023,” said the United Nations World Economic Situation and Prospects (WESP) 2022 report.

“The robust recovery in 2021, driven by strong consumer spending and some uptake in investment, with trade in goods surpassing pre-pandemic levels marked the highest growth rate in more than four decades.”

UN secretary-general Antonio Guterres said the momentum for growth, especially in China, the United States and the European Union, slowed considerably by the end of 2021, as the effects of monetary and fiscal stimuli began to recede, and major supply-chain disruptions emerged, while inflationary pressures in many economies began posing additional risks to recovery.

“In this fragile and uneven period of global recovery, the World Economic Situation and Prospects 2022 calls for better targeted and co-ordinated policy and financial measures at the national and international levels. The time is now to close the inequality gaps within and among countries,” he said.

“If we work in solidarity as one human family we can make 2022 a true year of recovery for people and economies alike.”

The UN report comes at a time when the World Bank projected that the number of Zimbabweans living in extreme poverty increased to 7,9 million in 2020 due to the impact of the COVID-19 pandemic.

The World Bank study also revealed that the impact of COVID-19 in Zimbabwe escalated extreme poverty to almost 50% in 2020 and impacted on the delivery of basic services in the areas of health, education and social protection.

Economic analyst Eddie Cross said:  “The domestic inflation is probably principled by the expansion in the domestic economy, and there is nothing we can do about it until we change the systems that we are using. So I don’t think inflation has got anything to do with the economic crisis. We are in the middle of a psychotropic upturn in global commodity prices, and this is giving us a huge increase in export earnings, and that is a major feature in terms of our growth going forward in 2022.

Cross said the country was likely to recover from the effects of the COVID-19 pandemic as it expected good agricultural yields this year due to good rains.

“We saw a recovery of jobs in 2021, so I don’t see a reason why the economy should not recover in 2022,” he said.