The Covid-19 pandemic is growing the gap between rich and poor countries, a pattern that threatens to reverse the years of economic progress to overcome global poverty.
- The pandemic plunged the global economy into recession last year, but richer countries have recovered faster than poorer ones largely due to the widespread access to vaccines and programs to support businesses and workers.
- The US economy bounced back to its pre-pandemic level in Q2 of 2021, and many other major economies are projected to follow the same path in 2022.
- Meanwhile, the economies of numerous developing countries could take longer to recover their 2019 size. The International Monetary Fund has described the widening rift as “the great divergence.”
The Omicron variant of Covid-19, first discovered in November in South Africa, presents a major challenge. The variant has spread faster globally, displacing older Covid-19 strains due to its ability to evade immunity conferred by previous infection or vaccine.
DXY up +0.10%, EUR USD down -0.17%
Source: The Wall Street Journal