Global | Emerging economies: the tortuous road to recovery

Summary

The coronavirus has ravaged both developed and emerging countries, with scant respect for borders. Its impact, however, has been and will continue to be geographically unequal, reflecting the different health and economic measures adopted by various countries.

Key points

• Key points:
• In general, the capacity to offset the effects of the crisis caused by the virus has been lower in emerging economies, which explains why the recession has been more pronounced in those countries than in the developed world.
• Except for a handful of countries, like China and Turkey, forecasts suggest it will take the vast majority of emerging markets longer to get back to pre-pandemic levels of GDP.
• In Latin America, though pre-crisis GDP will recover by 2022, it is likely that in 2025, five years after the start of the pandemic, regional GDP will be around four points lower than it is estimated would have been possible without the coronavirus crisis, suggesting a permanent loss of GDP.
• Looking forward, the difficulties in obtaining COVID-19 vaccines and the reduced room for maneuvre to adopt stimulus measures, is likely to make the process of economic recovery slower and more volatile in emerging markets.

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