World Bank warns of a “Lost Decade” for the Global Economy
The World Bank has issued a warning that the global economy is at risk of experiencing a “lost decade” due to the COVID-19 pandemic. According to the World Bank, the pandemic has caused a severe and widespread economic contraction, which has led to significant job losses, poverty, and inequality across the world.
The World Bank’s report states that the global economy is expected to grow by only 4% in 2021, following a contraction of 4.3% in 2020. This rate of growth is lower than pre-pandemic estimates, and the report warns that the recovery is expected to be slow and uneven. Furthermore, the report highlights that the pandemic has disproportionately affected developing countries, which are expected to face a more significant challenge in recovering from the economic shock.
The report also notes that there are several risks to the global economic recovery, including a slower-than-expected vaccine rollout, rising inflation, and a resurgence of COVID-19 cases. These risks could further delay the recovery, leading to a prolonged period of economic hardship and uncertainty.
Why this News is Important:
- The World Bank’s warning of a “lost decade” highlights the severity of the economic impact of the COVID-19 pandemic. This news is crucial for students preparing for government exams as it underscores the importance of understanding the economic policies and measures taken by various governments to tackle the pandemic’s economic fallout.
- The report’s focus on the disproportionate impact on developing countries highlights the importance of addressing global economic inequality. This news is essential for students preparing for civil service positions such as PSCS and IAS, where understanding global economic policies and development is critical.
Historical Context:
The COVID-19 pandemic has caused significant economic disruptions across the world. In early 2020, many countries implemented strict lockdowns and travel restrictions, causing a severe contraction of economic activity. The pandemic has also led to significant job losses, poverty, and inequality across the world.
The World Bank has been tracking the economic impact of the pandemic since early 2020 and has been providing regular updates on the global economic outlook. The World Bank’s warning of a “lost decade” follows previous reports highlighting the severe economic contraction caused by the pandemic.
Key Takeaways from “World Bank warns of a ‘Lost Decade’ for the Global Economy”:
| Serial No. | Key Takeaway |
|---|---|
| 1. | The global economy is at risk of experiencing a “lost decade” due to the COVID-19 pandemic, which has caused a severe and widespread economic contraction. |
| 2. | The global economy is expected to grow by only 4% in 2021, following a contraction of 4.3% in 2020. |
| 3. | The pandemic has disproportionately affected developing countries, which are expected to face a more significant challenge in recovering from the economic shock. |
| 4. | Several risks to the global economic recovery include a slower-than-expected vaccine rollout, rising inflation, and a resurgence of COVID-19 cases. |
| 5. | Understanding the economic policies and measures taken by various governments to tackle the pandemic’s economic fallout is crucial for students preparing for government exams. |
In conclusion, the World Bank’s warning of a “lost decade” for the global economy highlights the severity of the economic impact of the COVID-19 pandemic. The report’s focus on the disproportionate impact on developing countries underscores the importance of addressing global economic inequality. The risks to the global economic recovery highlight the need for continued policy action to support economic growth and stability. Students preparing for government exams must understand
Important FAQs for Students from this News
Q. What is the global economy facing according to the World Bank?
- The global economy is facing a lost decade, according to the World Bank. This means that there will be a prolonged period of slow economic growth and high unemployment.
Q. What factors are contributing to the lost decade?
- The COVID-19 pandemic and the slow pace of vaccination, along with high debt levels, trade tensions, and climate change are some of the factors contributing to the lost decade.
Q. How will the lost decade affect the job market?
- The lost decade is expected to lead to high unemployment rates, particularly among young people and women.
Q. How can countries prepare for the lost decade?
- Countries can prepare for the lost decade by investing in education and skills training, promoting digitalization and innovation, and implementing social safety nets.
Q. How will the lost decade impact global poverty rates?
- The lost decade is expected to push an additional 110 million people into extreme poverty
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