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According to the World Bank's newest Global Economic Prospects report, the global economy is undergoing a dramatic downturn with new dangers from COVID-19 variations and a rise in inflation, debt, and income inequality, which might jeopardise the recovery in emerging and developing nations. As pent-up demand fades and global fiscal and monetary assistance is removed, global GDP is predicted to slow sharply from 5.5 percent in 2021 to 4.1 percent in 2022 and 3.2 percent in 2023.
Prior to the conflict, sustained success with global immunisation efforts, supporting macroeconomic policies in key economies, and favourable financial conditions were projected to assist the worldwide recovery from the pandemic continue in 2022 and 2023. The war in Ukraine, on the other hand, will stifle global development and exacerbate inflationary pressures, generating a new negative supply shock for the global economy at a time when some of the pandemic's supply-chain issues appeared to be diminishing. The war's repercussions will manifest themselves in a variety of ways, and they will likely change as the fight progresses. Many governments will need to buffer the impact of rising energy prices in the foreseeable future by diversifying energy sources and increasing efficiency wherever possible.
Because of the rapid spread of the Omicron form, the pandemic is expected to continue disrupting economic activities in the foreseeable future. Furthermore, a noteworthy slowdown in big economies, such as the United States and China, will weigh on emerging and developing nations' external demand. New COVID-19 outbreaks, continuing supply-chain bottlenecks and inflationary pressures, and high financial vulnerabilities across wide swaths of the world might enhance the danger of a hard landing at a time when many developing countries lack the policy space to support activity if needed.
The COVID-19 pandemic has exacerbated the commerce in hazardous counterfeit goods. This is especially true in the case of counterfeit medications and medical equipment, where broken supply chains and high demand were met with law enforcement's limited ability to intercept. There have also been reports of counterfeit COVID-19 vaccines recently, posing a severe threat to vaccination programmes. Counterfeits harm consumers' health, safety, and the environment in addition to harming economic progress and fuelling organised crime. Legitimate suppliers are required to follow rules to ensure that their products are safe, whereas counterfeiters are not. For example, counterfeit feminine care items may be contaminated with bacteria, while counterfeit cigarettes may include banned harmful substances.
During 2017-19, the United States and European Union countries were the primary destinations for counterfeit dangerous goods. The United States received more than a third of all dangerous products seized worldwide, followed by Germany (21%), Belgium (9%), Italy (6%), and Denmark (2%). More than three-quarters of the counterfeit products seized came from China and Hong Kong.
Despite the world economy coming to a halt due to the COVID-19 epidemic, the latest available official records show that investment in research and development increased by 1.8 percent in the OECD area in 2020. This demonstrates how R&D investments have been a critical aspect of the crisis response, as governments recognise that R&D promotes innovation and growth. While this is a decrease from prior years, when yearly growth was at 5%, it is the first time in history that a worldwide recession has not resulted in a reduction in R&D spending.
After 2020, the momentum continued: a preliminary look at R&D expenditure in 2021 shows most companies improving, with the ICT and Pharma industries driving the majority of the rise, fuelled by a pandemic that altered global ICT demands through teleworking and sparked extensive vaccine development. Data for the fourth quarter of 2021 also suggest to a quick rebound in the industries with the most severely harmed R&D. If this pattern continues until 2022, it may result in a partial reversal of several decreasing tendencies.
Meanwhile, monetary policy is being hampered by growing inflation, which is particularly painful on low-income employees. Inflation is at its highest level since 2008, both globally and in industrialised nations. It has achieved its highest level in emerging market and developing economies since 2011. To minimise inflationary pressures, many emerging and developing economies are reducing policy support—well before the recovery is complete.