Clyde WTN

Global Economy 2021: Challenges

Water shortage is dynamic and multifaceted, resulting from the combined impacts of climate change, basin-level water supplies, and the adaptive capacity of management systems. Aside from geophysical pressures and reactions, it is essential to analyse how multi-sector, multi-scale economic teleconnections alleviate or worsen water scarcity.

We forecasted 5.5 percent global GDP in 2021 in January, but possibilities for a stronger rebound are emerging, owing to further fiscal stimulus, particularly in the United States, and the likelihood of widespread immunisation.

However, the global recovery has been uneven and inequitable. It is insufficient since, despite a stronger-than-expected recovery in the second half of 2020, GDP in most nations remains considerably below pre-pandemic levels. Recovery trajectories have also differed across nations and industries.

In many respects, China has already finished its recovery, returning to pre-pandemic levels of growth ahead of all big economies. However, growth remains unbalanced, with private consumption behind investment. We anticipate that consumption will catch up when investment growth returns to normal. However, there are substantial hazards, which I shall discuss shortly.

In the long run, growing carbon emission levels remind us that climate change is a big problem, and Asia plays a critical role in solving it. These issues are overwhelming, but they are solvable if all countries work together.

Outside of China, however, there are worrying signs that the divide between developed and developing nations is increasing. We predict that, excluding China, total income per capita in emerging and developing countries will be 22% lower between 2020 and 2022 than it would have been in the absence of the pandemic.

This translates to over 90 million individuals slipping below the severe poverty line since the epidemic began. China has been a shining light in its ongoing struggle against poverty, yet even there, the epidemic has disproportionately harmed the most vulnerable individuals.

We have no idea how long the health catastrophe will last. Vaccine access is highly unequal, both in industrialised and emerging economies. Low-income nations may not see major immunisation until 2022, which is a concern because the epidemic will only be really finished when it is over for everyone.

Another concern is the development of resistant mutations, which affects the efficacy of existing vaccinations and may impair or postpone recovery. Aside from these larger concerns, there are also doubts regarding the efficacy of policy measures and disparities in what nations may accomplish. Some countries are dealing with limited budgetary space and rising indebtedness.

Tighter financial conditions may aggravate vulnerabilities in nations with large levels of governmental and private debt. Bond rates have recently risen as the economic forecast for several advanced nations improves, causing markets to anticipate an early removal of monetary assistance.

The crisis may leave lasting wounds in the medium future. In the past, industrialised countries' production has fallen about 5% below pre-recession levels five years following the start of a recession. It might be worse in nations that cannot afford a robust macroeconomic response and/or have big service industries that are more vulnerable to the epidemic