Emerging and developing economies accounted for two thirds of global growth before the pandemic and around 86% of the world\u2019s population. The World Bank told them just this week that they must prepare for the possibility of their recoveries losing steam.<\/p>\n
A nascent economic revival in India — the world\u2019s sixth largest economy – is being threatened by renewed movement curbs across provinces to stem a new wave of infections that have topped 200,000 daily for the last week.<\/p>\n
\u201cThe new case spikes represent a reality check for the world economy as it is clear that the pandemic is nowhere close to being over,\u201d said Tuuli McCully, head of Asia Pacific economics at Scotiabank. \u201cMany lower-income economies continue to face severe Covid-19 related challenges and have a long road ahead before they are back to \u2018normalcy.\u2019\u201d<\/p>\n
More than 944 million vaccinations have been administered across 170 countries, according to data collected by Bloomberg – enough doses for 6.2% of the global population. But the distribution is lopsided with the highest income countries getting vaccinated about 25 times faster than those with the lowest.<\/p>\n
\u201cI see it as a race between virus mutations and vaccine rollout,\u201d said Rob Subbaraman, head of global markets research at Nomura Holdings Inc. \u201cMany people are not aware that while the 1918 Spanish flu is believed to have started in the US and then spread to Europe, in the end the countries that suffered most were in emerging markets. It\u2019s an ominous sign of history repeating itself.\u201d<\/p>\n
Markets are showing signs of jitters. A gauge of stocks in Asia has lagged global peers this month, while the Indian rupee is this week\u2019s worst-performing currency in the region. Investors have sought out traditional havens like the Japanese yen, and rewarded those with better track records of managing the outbreak such as the Israeli shekel, Taiwanese dollar and the British pound.<\/p>\n
Companies most reliant on a reopening of the global economy are especially vulnerable and the latest infection surge is overshadowing a \u201cpriced to perfection re-open trade,\u201d Stephen Innes, chief global market strategist at Axicorp Financial Services Pty Ltd in Sydney, wrote in a note to clients.<\/p>\n
Great expectations<\/strong><\/p>\n \u201cThe glaring problem is that despite strenuous efforts by the medical community around the globe, we are not even close to calling it a day so that people can start again or continue with things more productively,\u201d according to Innes.<\/p>\n The spread of cases threatens what\u2019s forecast to be a V-shaped recovery for global growth, led by the US and China. The IMF currently expects the world economy to grow 6% this year, the most in four decades of data. But it knows the longer the pandemic runs the harder it will be to meet that forecast.<\/p>\n \u201cThe window of opportunity is closing fast,\u201d managing director Kristalina Georgieva said. \u201cThe longer it takes to speed up vaccine production and rollout, the harder it will be to achieve these gains.\u201d<\/p>\n![\"\"](\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2021\/04\/Bloomberg-1.jpg\")
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