Editorial January - Year of hope

There is so much to hope for in 2021, but the World Bank has warned that global recovery will not reach the expected levels, “unless policy makers move decisively to tame the pandemic and implement investment-enhancing reforms.” In its January 2021 Global Economic Prospects, the financial institution emphasizes that “top near-term policy priorities are controlling the spread of COVID-19 and ensuring rapid and widespread vaccine deployment. To support economic recovery, authorities also need to facilitate a re-investment cycle aimed at sustainable growth that is less dependent on government debt.”
The report also points out that the short-term outlook is uncertain. “A downside scenario in which infections continue to rise and the rollout of a vaccine is delayed could limit the global expansion to 1.6% in 2021. Meanwhile, in an upside scenario with successful pandemic control and a faster vaccination process, global growth could accelerate to nearly 5%.”
Moreover, the report notes that the pandemic is likely to have long lasting adverse effects on global activity, and “if history is any guide, the global economy is heading for a decade of growth disappointments unless policy makers put in place comprehensive reforms to improve the fundamental drivers of equitable and sustainable economic growth.”
World Bank Group President David Malpass said: “While the global economy appears to have entered a subdued recovery, policymakers face formidable challenges - in public health, debt management, budget policies, central banking and structural reforms - as they try to ensure that this still fragile global recovery gains traction and sets a foundation for robust growth.”