Navigating the Uneven Global Economic Recovery Post COVID-19

The global economy is still on the way to its growth path after the effects of COVID-19, and this is because every country has its problems in reconstructing order. Even if the advanced economies have managed to achieve the economic pre-COVID levels for the most part, many of the less developed countries are not able due to the slow adoption of vaccines, disruptions in supply chains and increased debt. The disparities have highlighted the importance of focused international assistance for balanced global growth.

One of the most important components of recovery is state investment. A number of countries resorted to stimulus measures, putting the economy on a ventilator so to speak, which worked to absorb the economic downturn but led to external debts rising to unsustainable levels. Now, when inflation is on the rise and most central banks are in the process of increasing rates, the bared debt stocks are more painful especially for the poorer countries. While at the same time, the policymakers are under pressure to strike a balance between fiscal prudence and supporting growth.

The other effect of the pandemic was the intervention in the global networks of production and distribution in a manner that has caused monumental changes on different industries and trade. On the one hand, some industries, such as information technology, have experienced remarkable resumption, while others like the production and shipping industries still have blockages. These stoppages have caused inflation, and in some instances, caused regression in recovery in certain areas. Government and corporate expenditure on this strategy is however cheap and simple, yet the implementation of the strategies remains difficult and expensive.

The future development, however, post-COVID-19 recovery will require a number of measures to be successfully surmounted and that will call for coordinated international action. Improvement of international cooperation on vaccine deployment, provision of relief on the debts of developing countries, ensuring the stability of supply chains – these are all very important in this situation. And yet, as they deal with those problems, the pandemic has taught – and will continue to teach – a very important lesson, which is to always design an economic framework which is flexible and can withstand the shocks of both internal and external factors.