TheNewsGuru

Tag: Economic Growth

  • IMF projects 3% economic growth for Nigeria

    IMF projects 3% economic growth for Nigeria

    The International Monetary Fund (IMF) has released it new economic outlook report, reversing Nigeria’s economic growth projections for 2025 and 2026.

    The April report was released on Tuesday during World Economic Outlook (WEO) at a press briefing at the ongoing IMF/World Bank 2025 Spring Meetings in Washington, D.C.

    The report cut the forecast for Nigeria’s growth to 3.0 per cent for 2025 and 2.7 per cent for 2026, from the 3.2 per cent and 3.0 per cent projection earlier stated in the January WEO update.

    The IMF report cited mounting global uncertainties and sustained weakness in oil prices.

    According to the report, the IMF places the growing probability of a global recession at 40 per cent compared to previous 25 per cent estimation it released in October 2024.

    The IMF attributed the downward revision of the the growth to a combination of domestic economic challenges and worsening global conditions.

    It said this includes trade tensions, reduced demand from advanced economies, and a significant drop in crude oil prices.

    In the report, the Fund warned that without strong policy responses, Nigeria might find it difficult to maintain macroeconomic stability amid external headwinds.

    The IMF Economic Counsellor and Director of Research Department, Pierre-Olivier Gourinchas, said that emerging economies like Nigeria were particularly vulnerable due to their integration into global supply chains.

    “The uncertainty is discouraging investment and activity, and these countries are suffering from declining demand for their exports,” Gourinchas said.

  • Tinubu set to depart Nigeria for UNGA78 summit

    Tinubu set to depart Nigeria for UNGA78 summit

    Nigeria’s President, Bola Ahmed Tinubu, is set to depart for New York, United States, on Sunday to attend the Annual Meeting of World Leaders at the United Nations General Assembly, UNGA78.

    The theme for the 78th session, “Rebuilding Trust and Reigniting Global Solidarity: Accelerating Action on the 2030 Agenda and its Sustainable Development Goals towards Peace, Prosperity, Progress, and Sustainability for All”, sets the tone for vital discussions on global development and collaboration.

    Addressing State House Correspondents on the President’s schedule and priorities in New York, his Special Adviser on Media and Publicity, Ajuri Ngelale, said President Tinubu’s main focus at the General debates is to promote Nigeria’s economy.

    The President will hold crucial bilateral meetings on the sidelines with various world leaders and heads of international organizations, including the President of the United States, the President of South Africa, the President of the European Union Commission, and more.

    “President Tinubu will be having investment at the front and centre of his conversations with his counterparts around the world. And these engagements include bilateral meetings on the sidelines with the President of the United States, the president of Comoros, the President of South Africa the President of the European Union Commission, the Prime Minister of the Netherlands, the King of Jordan, with the Algerian president with the Brazilian president and with the Spanish Prime Minister,” Ngelale said.

    He further said that “the Nigerian President will hold meetings with major Chief Executives and leaders of Multinational firms cutting across multiple sectors of the economy.” Discussions will revolve around leveraging technology for the benefit of Nigeria’s Micro, Small, and Medium Enterprises (MSMEs).

    Additionally, President Tinubu will speak at the UN High-Level reform of the global financial architecture, advocating for a fairer international financial system that includes meaningful participation from developing countries.

    He will also actively participate in the UN Secretary General’s Climate Ambition Summit, detailing his vision for Nigeria’s energy transition and how various stakeholders can contribute to achieving Nigeria’s ambition of net zero by 2060.

  • Africa’s slow economic growth insufficient to reduce extreme poverty – World Bank

    Africa’s slow economic growth insufficient to reduce extreme poverty – World Bank

    The growth recovery in Nigeria for 2023 is still fragile as oil production remains subdued and the new administration faces many policy challenges.

    A new world bank report has revealed that Sub-Saharan Africa faces a myriad of challenges to regain its growth momentum, including the protracted slowdown of growth of investment in the region, which limits its efforts to reduce extreme poverty and boost shared prosperity in the medium to long term.

    The April 2023 edition of the World Bank Africa’s Pulse data report showed that growth across Sub-Saharan Africa remained sluggish as a result of “uncertainty in the global economy, the underperformance of the continent’s largest economies, high inflation, and a sharp deceleration of investment growth”.

    This outlook poses challenges to policy makers in the region who seek to accelerate the post-pandemic recovery, reduce poverty, and put the economy on a sustainable growth path.

    Economic growth slowed to 3.6 per cent in 2022, from 4.1 per cent in 2021 and economic activity in the region is projected to further slow down to 3.1 per cent in 2023, a 0.4 percentage point downward revision compared to the October 2022 Africa’s Pulse forecast.

    “Growth is estimated to pick up to 3.7 and 3.9 per cent in 2024 and 2025, respectively – thus signalling that the slowdown in growth should be bottoming out this year,” the report said.

    A rebound of global growth later this year, easing of austerity measures, and more accommodative monetary policy amid falling inflation are the main factors contributing to the increased growth along the forecast horizon.

    The report noted that the growth recovery in Nigeria for 2023 (2.8 per cent) was still fragile as oil production remained subdued and the new administration faces many policy challenges.

    Inflation remains persistently high and above target and will continue to weigh on economic activity; consumer price inflation in Sub-Saharan Africa accelerated sharply and hit a 14-year record high in 2022 (9.2 per cent), fueled by rising food and energy prices as well as weaker currencies.

    Climate shocks, especially in the Horn of Africa, add inflationary pressures from the supply side and the number of countries with two-digit average annual rates of inflation increased from 9 in 2021 to 21 in 2022.

    Public debt in Sub-Saharan Africa has more than tripled since 2010, with a sharp increase prior to the onset of the COVID-19 crisis.

    According to the report, the surge in public debt has been accompanied by a shift in its composition toward domestic debt—particularly, to meet pandemic-related financing needs and domestic debt accounted for nearly half of the outstanding public debt by the end of 2021.

    “Fiscal dominance and foreign exchange rate restrictions may lead to inflation outcomes that are contrary to what monetary tightening intends.

    “In Sub-Saharan Africa, curbing inflation remains essential to boost people’s incomes and reduce uncertainty around consumption and investment plans,” the report said.

    Therefore, it recommended that policies to fight against inflation should be complemented by income support measures (via cash or food transfers) to protect the most vulnerable from stubbornly high inflation—particularly, food inflation.

    It added that African governments must sharpen their focus on macroeconomic stability, domestic revenue mobilisation, debt reduction, and productive investments in the face of dampened growth prospects and rising debt levels.

    “In a time of energy transition and rising demand for metals and minerals, resource-rich governments have an opportunity to better leverage natural resources to finance their public programs, diversify their economy, and expand energy access.

    “Africa’s natural resource wealth holds significant untapped economic potential. About one-third of the total stock of wealth in Sub-Saharan Africa is held in various forms of natural capital, including renewable natural capital like cropland, water resources, and forests, as well as nonrenewable subsoil assets.”

    The region’s nonrenewable petroleum and mineral deposits reached more than US$5 trillion in value during the boom years (2004–14) and Sub-Saharan Africa has seen more major petroleum discoveries since 2000 than any other region in the world.

  • Global economic growth projected to slow in 2023

    Global economic growth projected to slow in 2023

    Global economic growth was projected to slow to 1.7 per cent in 2023, 1.3 percentage points below the forecast made in June last year.

    Marking its third-weakest pace in nearly three decades, the World Bank Group said in its latest Global Economic Prospects release.

    Given such adverse shocks as high inflation, rising interest rates, sluggish investment and the Ukraine crisis, global growth has slowed “to the extent that the global economy is perilously close to falling into recession.’’

    The downgrade reflected synchronous policy tightening aimed at containing very high inflation, as well as deteriorating financial conditions, declining confidence and energy supply disruptions, it said.

    Noting that the adjusted global growth forecast is overshadowed only by the 2009 and 2020 global recessions, the report said in 2024.

    The global economy was on track to grow by 2.7 per cent.

    More specifically, the report said that growth for advanced economies was projected to slow to 0.5 per cent in 2023, 1.7 percentage points below the June forecast.

    U.S. economic growth forecast for this year has been downgraded by 1.9 percentage points to 0.5 per cent.

    The weakest performance outside of recessions since 1970.

    The Eurozone economy was projected to grow at 0 per cent, down 1.9 percentage points from the previous forecast.

    Meanwhile, the report said that growth for emerging and developing economies is projected to slow to 3.4 per cent in 2023, 0.8 percentage points below the June forecast.

    It added that global trade volume will grow 1.6 per cent this year, down 2.7 percentage points from the previous forecast.

  • IMF retains projected economic growth of 3.4% for Nigeria

    IMF retains projected economic growth of 3.4% for Nigeria

    The International Monetary Fund (IMF) has retained projected economic growth of 3.4% for Nigeria in 2022, TheNewsGuru.com (TNG) reports.

    The Washington-based institution disclosed this in its World Economic Outlook (WEO) for July 2022, dubbed “gloomy and more uncertain”.

    The IMF lowered its global growth forecast and raised its inflation outlook due to recent blows to the pandemic-weakened world economy.

    In its updated forecast on Tuesday, the IMF expects global growth of 3.2 per cent this year, 0.4 percentage points less than what was projected in April.

    For the eurozone, the IMF expects growth to be 0.2 percentage points lower than April forecast, at 2.6 per cent.

    This year, the IMF expects an inflation rate of 6.6 per cent in the industrialised countries and 9.5 per cent in emerging markets, upward revisions of 0.9 and 0.8 percentage points, respectively.

    The IMF said the new assessments are due to “higher-than-expected inflation worldwide especially in the United States and major European economies’’.

    This it said, triggering tighter financial conditions; a worse-than-anticipated slowdown in China, reflecting COVID-19 outbreaks and lockdowns; and further negative spillovers from the war in Ukraine.’’

    It warned that, with increasing prices continuing to squeeze living standards worldwide, taming inflation should be the first priority for policymakers.

    “Tighter monetary policy will inevitably have real economic costs, but delay will only exacerbate them,’’ it said.

    In the United States, the economy growth was revised down to 2.3 per cent amid reduced household purchasing power and the central bank’s moves to hike interest rates.

    In China, COVID-19 outbreaks and lockdowns, as well as a further escalation of the property sector crisis, could further suppress growth, which was revised down by 1.1 percentage points to 3.3 per cent

    Meanwhile, China’s slowdown would have major global consequences, it warned.

    However, the IMF added that policies to address specific impacts on energy and food prices “should focus on those most affected without distorting prices.’’

    It also called on nations to raise COVID-19 vaccination rates in view of future new variants.

    According to the report, mitigating climate change continues to require “urgent multilateral action to limit emissions and raise investments to hasten the green transition,’’.

  • How Dangote’s petrochemicals, fertiliser plant will accelerate Africa’s economic growth – AfDB

    How Dangote’s petrochemicals, fertiliser plant will accelerate Africa’s economic growth – AfDB

    President of the African Development Bank (AfDB), Akinwumi Adesina has described Dangote Refinery and Fertiliser projects as the best industrialised project to happen to Africa.

    He said these projects, which are far beyond the expectation of his team and himself, would positively affect the economic growth and development of not only Nigeria but Africa as a continent.

    The AfDB boss, who was on a tour of Dangote refinery and fertiliser projects over the weekend with the board members of the bank, described Aliko Dangote as an enigma, who should be honoured in Africa and even beyond for his passion, vision and determination to develop and ensure that Africa, as a continent, is out of the poverty circle; with his aggressive employment generation scheme across most African countries.

    According to him: “One of the things I admire the most about Alhaji Dangote is that, he actually believes in Nigeria, and he invests his money in Nigeria. He believes in Africa and invests in Africa. Nobody could invest the type of billions of dollars that is here, unless the person not only has the vision but also the commitment and passion for his country. We are extremely proud of you and of your commitment to the continent.

    “Aliko is quite an inspirational and visionary business leader and for anybody to have done what I have seen here, I think that person deserves world class kudos for that… I see a company that I will proudly call Africa’s growth accelerator company. With this project, we see an acceleration of how to reduce imports. We see an acceleration on how to have an outbound on export; a value chain development and how to compete regionally and globally”, the top banker said.

    “I am completely blown away with what I saw here today…I can’t believe what I saw…this project will reverse the huge sum the nation spends on foreign exchange…when you look at how much we import, it is about $57 billion worth of different products and we export only about $50.4bn, so we have to balance that with about $7bn and talking to them here, they showed us that they can have a domestic market of about $11bn and that is an incredible market and that will save Nigeria about $9 billion dollars, a year from importing petroleum products, so this is huge for Nigeria and even for Africa as a continent,” Adesina enthused.

    On the fertiliser complex, he said, “being a man passionate about agriculture, this is a company that is producing three million metric tonnes of urea, which will make Nigeria totally self-sufficient”, and added that, “Nigeria will become net exporter of fertilisers. It will drive productivity growth in Nigeria, prices will come down and the quality will also improve.”

    While thanking the AfDB team for their visit to the Plants, President of Dangote Group, Aliko Dangote said, “The Refinery will commence operation by the third quarter of 2022. On the mechanical completion, we are almost finished but we have started hydro testing, almost 70 per cent gone, hopefully before the end of Q3 operation will commence.”

    Group Executive Director, Strategy, Portfolio Development & Capital Projects, Dangote Industries Limited, Devakumar Edwin said the refinery complex, which includes a refinery, petrochemical plant, a fertiliser plant and a subsea pipeline project, is the largest single-train refinery in the world.

    He stated that the 650,000 barrels-per-day refinery would stimulate economic development in Nigeria. According to Edwin, Dangote Petroleum Refinery can meet 100 per cent of the Nigerian requirement of all liquid products (Gasoline, Diesel, Kerosene and Aviation Jet), and also have surplus of each of these products for export.

    He stated that this would create a market for $11 billion per annum of Nigerian crude and foreign exchange savings/earnings $9.9 billion. He noted that, “we have impacted on job creation with 3,580 Nigerian personnel on site, excluding employment by the various contractors and subcontractors at the site.”

  • IMF upgrades Nigeria’s economic growth forecast to 2.7%

    IMF upgrades Nigeria’s economic growth forecast to 2.7%

    The International Monetary Fund, IMF, has upgraded its forecast for Nigeria’s economic growth in 2022 and 2021 to 2.7 per cent and 2.6 per cent respectively, citing recovery in non-oil sectors and the rising price of crude oil.

    The IMF had earlier in April projected that Nigeria’s economy will grow by 2.3 per cent and 2.5 per cent in 2022 and 2021 respectively.

    The latest forecast was contained in the IMF’s “Regional Economic Outlook for October 2021” released yesterday at the sidelines of the ongoing Annual Meetings of the IMF and World Bank in Washington.

    However, the 2.7 percent growth projected by IMF for Nigeria in 2022 represents 1.5 percentage points below the 4.2 per cent growth projected for 2022 by the Federal Government in its Draft 2022 to 2024 Medium Term Fiscal Framework and Fiscal Strategy Paper (MTFF/FSP).

    “In 2022, we are expecting an uptake to 4.2 per cent, then a dip to 2.3 per cent in 2023 and up to 3.3 per cent in 2024,” said Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed at the public consultation on the Draft 2022 to 2024 MTFF/FSP.

    The IMF also projected that the Sub-Saharan economy will grow by 3.8 per in 2022 and by 3.7 per cent this year.

    The IMF said: “Nigeria’s economy will grow by 2.6 percent in 2021, driven by the recovery in non-oil sectors and higher oil prices, even though oil production is expected to remain below pre-COVID-19 levels.

    “Growth will inch up slightly to 2.7 percent in 2022 and remain at this level over the medium term, allowing GDP per capita to stabilize at current levels, notwithstanding long-standing structural problems and elevated uncertainties.”

    In its projection for the Sub-Saharan African, the IMF said: “Sub-Saharan Africa is set to grow by 3.7 percent in 2021 and 3.8 percent in 2022. This rebound is most welcome and largely results from a sharp improvement in global trade and commodity prices. Favorable harvests have also helped lift agricultural production.

    “But the recovery is expected to be slower than in advanced economies, leading to a widening rift in incomes. This divergence is expected to persist through the medium term – partly reflecting different access to vaccines, but also stark differences in the availability of policy support.

    “The outlook remains extremely uncertain, and risks are tilted to the downside. In particular, the recovery depends on the path of the global pandemic and the regional vaccination effort, and is also vulnerable to disruptions in global activity and financial markets.”

  • Nigeria recorded biggest economic growth in six years – Buhari

    Nigeria recorded biggest economic growth in six years – Buhari

    President Muhammadu Buhari said the focus on job creation, consistency in policy and innovation stimulated a 5 per cent growth of the economy in the second quarter, 2021, which is the highest in six years.

    The president stated this on Tuesday at the launch of the Nigeria Jubilee Fellows Programme in State House.

    He assured that Jubilee Fellows Programme will further consolidate on the success recorded.

    The President also listed some of the key drivers of economic growth and diversification in the second quarter to include telecommunications, transportation, electricity, agriculture and manufacturing.

    “Tuesday, 22nd June 2021, I set up the National Poverty Reduction with Growth Strategy (NPRGS) steering committee to coordinate our work to fulfil my promise to lift 100 million Nigerians out of poverty in ten years. This is building on the positive results from the Economic Recovery and Growth Plan and the targeted response to the effects of the COVID-19 pandemic with the Economic Sustainability Plan.

    “These efforts have yielded results with Nigeria recording its biggest economic growth in six years with a GDP growth of 5 per cent in the second quarter of 2021. The sectors that drove this growth are trade, telecommunications, transportation, electricity, agriculture and manufacturing. Each of these sectors showed significant improvement and thus created more jobs for our populace.

    “An important part of our policies and strategies is the focus on employment and creating opportunities for our people. When this government was elected in 2015, we committed to increasing job opportunities for Nigerians and as part of our social investments programme we recruited 500,000 graduates into our N-power programme,’’ he noted.

    In 2019, the President said he directed that the number of graduates be increased to 1 million.

    “These graduates are recruited to work in agricultural, health and education institutions across the country. The N-power programme also has a non-graduate component that provides skills to tens of thousands of Nigerians in areas such as technology, masonry, auto repairs, and carpentry.

    “We estimate that about 2 million people join our labour force annually. We continue to work with our partners to provide more opportunities to create jobs and the Nigeria Jubilee Fellows Programme in partnership with the United Nation’s Development Programme being one of such opportunities,’’ he added.

    The President said, “The jubilee programme will provide a pathway for young Nigerians to gain work experience in top tier organisations, gaining relevant skills and building the right networks for the future in various sectors including information and communications technology, financial services, trade, manufacturing, agriculture and agro-processing.

    “Other sectors include mining, telecommunications, creative industries and technology, education, health, research and development, and public sector institutions. We believe that building the right skills and experiences across these sectors are important to sustain the economic growth we are experiencing.’’

    He said the programme will build on other efforts of the government to support young Nigerians such as the N75 billion youth fund in the Ministry of Youth and Sports Development, which was created to support young Nigerians in business or with business ideas, with N25 billion released annually for three years.

    “The Economic Sustainability Plan (ESP) was our response to the COVID-19 pandemic. We have set up a survival fund that has helped many businesses stay afloat in the worst economic periods of the last 5 years, more than one million Nigerians have benefitted from the fund, with more than 500,000 benefitting from the MSMEs Payroll support track, approximately 270,000 beneficiaries of the artisan support track, and about 50,000 beneficiaries of the MSME grant scheme,’’ the President added.

    According to him, the International Labour Organisation estimated the equivalent of an unprecedented 255 million jobs being lost around the world as a result of the COVID-19 pandemic.

    President Buhari noted that the Nigeria Jubilee Fellows Programme, being a fully paid post-NYSC work placement programme would provide an opportunity for mentors who were already engaged in various industries, gained relevant experience and built capacity over the years to provide mentorship and support for young Nigerians.

    “Beyond the skills and work experience, we will be building a new culture of mentorship and guidance that can chart a new course for skills development and work experience in our country.

    “We believe that as this programme creates new opportunities for 20,000 recent graduates annually, the beneficiaries will use the opportunities presented to them and maximize their 12 months of engagement,’’ he said.

    The President encouraged all eligible Nigerians to apply for the jubilee programme.

    He urged private sector organizations to join by providing work placement opportunities, mentors and funding.

    “I would like to say thank you to the United Nations Development Programme and the European Union for their support on this vital initiative. And I hereby declare the program open,’’ he said.

    In his remarks, the Minister of Industry, Trade and Investment, Otunba Adeniyi Adebayo said the government remains appreciative of the role of the private sector in transforming economies by creating employment and employment opportunities and investments.

    He said start-ups, largely driven by young Nigerians, attracted 170 million dollars in the past year, which was the highest on the African continent, explaining that the Nigeria Jubilee Fellows Programme was to celebrate the nation’s 60th anniversary.

    Adebayo noted the role of Vice President Yemi Osinbajo in driving the initiative to fruition and support of the United Nations Development Programme (UNDP).

    The Resident Representative of UNDP, Mohammed Yahya assured that the UN will continually support Nigeria to move human potentials across the country to capacities and skills that will place the country on a better pedestal.

    “Each day, young Nigerians continue to break barriers with their capacity and ingenuity,’’ he said, “Young Nigerians have produced outstanding innovations. There is no shortage of talents in Nigeria.’’

    EU Deputy Head of Delegation, Alexandre Borges Gomes and UN Resident Coordinator, Edward Kallon, commended the initiative, saying the programme benefitted from wide consultations.

  • We’ll put in place policies to boost economic growth – Makinde

    We’ll put in place policies to boost economic growth – Makinde

    Gov. Seyi Makinde of Oyo State says his administration will continue to put in place policies that will boost the economic growth of the state.

    Makinde stated this at an interactive session with leaders of market and artisans’ associations across the state.

    The News Agency of Nigeria (NAN) reports that the meeting was held at the Government House, Agodi, Ibadan on Thursday..

    The governor emphasised that his government would ‘do the needful’ to boost the businesses of the traders to make life comfortable for everyone.

    On the leadership crisis rocking the traders’ association, Makinde posited that he would set up a committee to explore all means of securing an amicable resolution of the crisis.

    Earlier, Mrs Odunayo Danjuma, Southwest Coordinator, National Association of Nigerian Traders and the Acting Iyaloja of Oyo State, Mrs Justina Ogundoyin, appreciated the governor for providing loans to traders and artisans in the state.

    The duo promised that the traders would continue to contribute their quota to the economic development of the state.

    Danjuma, however, appealed to the governor to intervene and resolve the lingering leadership crisis among market women and men in the state with the view to having an acceptable leadership.

  • World Bank predicts economic growth for Nigeria in 2021

    World Bank predicts economic growth for Nigeria in 2021

    The World Bank says global economy is expected to grow by 4 per cent in 2021, assuming an initial COVID-19 vaccine rollout becomes widespread throughout the year.

    It said this in a statement issued in Washington D.C. on Tuesday at the presentation of the January 2021 Global Economic Prospects.

    It added that the said recovery would likely be subdued unless policy makers moved decisively to tame the pandemic and implement investment-enhancing reforms.

    The bank also said that growth in Sub-Saharan Africa was forecast to rebound moderately to 2.7 per cent in 2021, while Nigeria’s growth was expected to resume at 1.1 per cent.

    For the region, it said that while the recovery in private consumption and investment was forecast to be slower than previously envisioned, export growth was expected to accelerate gradually, in line with the rebound in activity among major trading partners.

    “Expectations of a sluggish recovery in Sub-Saharan Africa reflect persistent COVID-19 outbreaks in several economies that have inhibited the resumption of economic activity.

    “The pandemic is projected to cause per capita incomes to decline by 0.2 per cent this year, setting Sustainable Development Goals (SDGs) further out of reach in many countries in the region.

    “This reversal is expected to push tens of millions more people into extreme poverty over last year and this year,” it stated.

    For Nigeria, it said activity was anticipated to be dampened by low oil prices, Organisation of Petroleum Exporting Countries (OPEC) quotas, falling public investment due to weak government revenues, constrained private investment due to firm failures and subdued foreign investor confidence.

    It, however, said that the rebound in Africa was expected to be slightly stronger, although below historical averages among agricultural commodity exporters, adding that higher international prices for agricultural commodities were expected to sustain activity.

    Projecting risks for the region, it said that they were tilted to the downside as growth in major trading partners could fall short of expectations.

    It said that wide scale distribution of a COVID-19 vaccine in the region would likely face many hurdles, including poor transport infrastructure and weak health systems capacity.

    “Such constraints, compounded by natural disasters such as recent devastating floods and rising insecurity, particularly in the Sahel, can delay recovery.

    “Government debt in the region has increased sharply to an estimated 70 per cent of Gross Domestic Product (GDP) in 2020, elevating concerns about debt sustainability in some economies.

    “Banks may face sharp increases in non-performing loans as companies struggle to service their debt due to falling revenues.

    “Lasting damage of the pandemic can depress growth over long term through the chilling effects of high debt on investment, the impact of lockdowns on schooling and human capital development, and weaker health outcomes,” it said.

    On the global scene, it said that to support economic recovery, authorities also needed to facilitate a re-investment cycle aimed at sustainable growth that was less dependent on government debt.

    It however, said that the collapse in global economic activity in 2020 was estimated to have been slightly less severe than previously projected, mainly due to shallower contractions in advanced economies and a more robust recovery in China.

    “In contrast, disruptions to activity in the majority of other emerging markets and developing economies were more acute than expected,” it said.

    David Malpass, the bank’s President said that while the global economy appeared to have entered a subdued recovery, policymakers faced formidable challenges as they tried to ensure that this still fragile global recovery gained traction and sets a foundation for robust growth.

    “To overcome the impacts of the pandemic and counter the investment headwind, there needs to be a major push to improve business environments, increase labor and product market flexibility and strengthen transparency and governance,” it said.

    The report said that the near-term outlook remained highly uncertain and different growth outcomes were still possible, adding that a downside scenario in which infections continued to rise and the rollout of a vaccine delayed, could limit the global expansion to 1.6 per cent in 2021.

    Meanwhile, it said that in an upside scenario with successful pandemic control and a faster vaccination process, global growth could accelerate to nearly five per cent.

    Examining the amplified risks of the pandemic, it said that as severe crises did in the past, the pandemic was expected to leave long lasting adverse effects on global activity.

    “It is likely to worsen the slowdown in global growth projected over the next decade due to underinvestment, underemployment and labor force declines in many advanced economies.

    “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.

    “Policymakers need to continue to sustain the recovery, gradually shifting from income support to growth-enhancing policies,” it further said.

    It added that in the longer run, in emerging markets and developing economies, policies to improve health and education services, digital infrastructure, climate resilience, and business and governance practices would help mitigate the economic damage caused by the pandemic, reduce poverty and advance shared prosperity.

    The bank said that in the context of weak fiscal positions and elevated debt, institutional reforms to spur organic growth were particularly important.