The World Bank has warned that developing countries will fall further behind richer nations as they struggle to recover from the economic fallout of the pandemic due to the spread of a variant of the coronavirus and its limited capacity for stimulus.

In new economic forecasts released on Tuesday, the Washington-based agency said it expects the global economy to experience a two-speed recovery in 2022, which will increase inequality. While output in rich countries will return to pre-pandemic levels by 2023, developing countries will still be on average 4% below pre-pandemic levels.

The weak rebound from the impact of the coronavirus will be particularly severe in the most vulnerable countries; output in fragile, conflict-affected and small island states will remain 7.5% to 8.5% below pre-pandemic levels by next year, the bank said.

Ayhan Kose, head of the World Bank’s economic forecasting department, said developing countries face “too many risks” that increase the likelihood of a hard landing, including the onset of new variants, rising inflation, and rising interest rates. Coming financial market stress and climate change-related disasters. He called on the international community to take more aggressive action on vaccines, debt and climate change.

“These problems are not going away,” he said. “It’s not that we don’t know what the problems are, or that we don’t have a framework to deal with them. . . the question is whether the international community and national policymakers can implement our prescriptions at the aggregate level.”

Emerging and developing economies have been unable to implement the massive fiscal and monetary responses to the outbreak that advanced economies have, and many have been forced to raise interest rates in response to surging inflation, Gauss said.

“[They] Do what it can, but it is nowhere near the capabilities of advanced economies. Now they are withdrawing support faster,” he said. “This is an unequal epidemic that will spread across generations. “

Kose called on the G20 group of large economies to speed up debt relief and do more to ensure the participation of private sector lenders. In particular, he pointed to the need for more ambitious action to protect developing economies from the virus.

“In terms of a vaccine, the problem is very clear, and there are consequences for not addressing it,” he said. “We pretend we can beat a pandemic without vaccinating large numbers of people around the world. That’s not true.”

The bank’s warning echoes similar calls from other global institutions.

Rebeca Grynspan, secretary-general of the United Nations Conference on Trade and Development, said the global distribution of vaccines was “bad and irrational” and that advanced economies had reached supply agreements to deliver more doses than their populations needed. 3 billion doses, or almost enough to provide two doses for the whole of Africa.

“The cost of the pandemic is escalating beyond anything we’ve seen before, not just in terms of debt and the health of millions of citizens,” she said.

The spread of the new variant “has affected the recovery and undermined the legitimacy of governments and democratic institutions around the world,” she said. . . . if we don’t find the political will and space to negotiate, unfortunately, reality will lead us to a very bad outcome.”

IMF Managing Director Kristalina Georgieva, warned last year The world “is facing a deteriorating dual-track recovery” due to differences in vaccine availability, infection rates and countries’ ability to provide policy support. She called it “a critical moment that requires urgent action from the G20 and policymakers”.