WEF warns of potential split in global economy
Experts warn that an uneven global economic recovery could deepen divisions within societies and between countries in the near future. According to the World Economic Forum, the world economy risks splitting "into divergent trajectories" due to labor market imbalances as well as widening education and skills gaps.
The WEF report says that economic stagnation provoked by the coronavirus pandemic, coupled with a host of old problems, poses a serious threat to the whole world. The latest projections suggest that by 2024, the global economy will shrink by 2.3% compared to pre-pandemic levels. "Rising commodity prices, inflation, and debt are emerging risks. Moreover, with another spike in COVID-19 cases, the pandemic continues to stifle countries’ ability to facilitate a sustained recovery," the organization said in a report. All of these factors could tear the world economy apart, thus widening the gap between countries, experts believe.
According to the WEF survey, only 11% of the respondents expect the global economic recovery to accelerate by 2024, while 89% consider the short-term outlook to be unsustainable. At the same time, 84% of global experts surveyed by the World Economic Forum are pessimistic about global economic growth prospects. "The global economic recovery risks being thrown off track by the omicron variant of the coronavirus. Particularly Europe looks vulnerable: Recoveries for Germany, France and Italy are increasingly under strain," Tom Orlik, chief economist for Bloomberg Economics, noted.