The global economy has achieved only a fragile recovery from the depths of the coronavirus pandemic and many emerging economies are still suffering severe hardship, according to the latest Brookings-FT tracking index.
Growth in the world’s largest economies has been uneven according to the index, which highlights the precarious outlook that will form the backdrop for the annual meetings of the IMF and World Bank this week.
With a second wave of coronavirus undermining efforts to return to normal, businesses’, households’ and investors’ confidence shaken and little scope for additional monetary policy stimulus, most countries have a long way to go before output reaches pre-pandemic levels.
“A broad-based and robust recovery does not appear on the horizon,” said Professor Eswar Prasad of the Brookings Institution, adding that the “risks of substantial and long-lasting scarring effects on economies are rising”.
The meetings will be held virtually from Washington this week. Kristalina Georgieva, managing director of the IMF, said last week the recovery from the Covid-19 crisis would be, “long, uneven and uncertain. And prone to setbacks.”
Economic data from across the world are weaker than the worst point in any previous downturn since the Brookings-FT Tracking Index for the Global Economic Recovery (Tiger) started in 2012.
The index compares indicators of real activity, financial markets and confidence with their historical averages for the global economy and for individual countries, capturing the extent to which data in the current period is normal.
It showed the recovery in advanced economies is far from complete after a historic drop in the spring, and the situation in emerging markets is much worse with indicators still far removed from normal levels.
Even though manufacturing has recovered strongly, boosting world