GLOBAL ECONOMIC PROSPECTS | JUNE 2022
CHAPTER 1
BOX 1.1 Regional perspectives: Outlook and risks (continued) FIGURE B1.1.1 Regional outlooks Growth in most emerging market and developing economy regions is expected to slow sharply this year, despite the fact that the recovery from the pandemic is far from complete. The Russian Federation's invasion of Ukraine has led to a substantial downgrade in the forecast for Europe and Central Asia, and is also weighing on regions with large numbers of commodity importers. Per capita income is expected to be lower in 2023 than in 2019 in about half of the countries in East Asia and the Pacific, the Middle East and North Africa, Latin America and the Caribbean, and Sub-Saharan Africa. A. Output growth Percent change from previous year
ECA
C. First year in which 2019 per capita
B. Revisions to 2022 forecast since
income is surpassed
January
LAC
Percentage points 6
Percentage points 2
ECA AEs (RHS)
SAR
EAR
LAC
SSA
MNA
Percent of countries • 2022 "2023 100
EAP
MNA
LAC
Beyond 2023
SSA
SAR
ECA
Source: World Bank. Note: AEs = advanced economies; EAP = East Asia and Pacific, ECA = Europe and Central Asia, LAC = Latin America and the Caribbean, SAR = South Asia, SSA = Sub-Saharan Africa. A.B. Aggregates are calculated using constant GDP weights at average 2010-19 prices and market exchange rates. A. Shaded areas indicate forecasts. C. Sample includes 22 EAP, 23 ECA, 30 LAC, 17 MNA, 7 SAR, and 47 SSA economies.
The combined effects of the pandemic, increased inflation, the war in Ukraine, and country-specific factors are expected to lead to a net increase of 75 million people in extreme poverty by the end of this year relative to pre-pandemic projections, primarily in regions where poverty is already elevated. Per capita income is expected to be lower in 2023 than its prepandemic level in about half of the countries in EAP (predominantly small island economies), MNA, Latin America and the Caribbean (LAC), and SSA (figure Bl.l.l.C). Within regions, the recovery in per capita incomes is expected to be slowest low-income countries and island economies dependent on tourism, where incomes remain deeply depressed relative to prepandemic levels. In tourism dependent EMDE small states (countries with populations under 1.5 million), most of which are in EAP and LAC, per capita income is expected to remain 7 percent below its pre-pandemic level in 2022.
Risks Downside risks to the baseline forecast, many of which have increased since Russia's invasion of Ukraine, dominate all regional outlooks. Intensifying geopolitical
tensions could result from the use of weapons of mass destruction, the spread of the war in Ukraine to a larger region, a prolongation of the war, or widespread statesponsored cyberattacks on public infrastructure or financial systems. This could result in lower global demand, renewed trade disruptions, greater policy uncertainty, further damage to business and consumer confidence, and refugee crises. Although these risks are especially pronounced in the ECA region, spillovers would also cast a shadow over activity in other regions, especially those that are most dependent on integration into global supply chains and foreign demand, notably EAP. Shortages of vital inputs due to production disruptions or trade barriers—such as those related to sanctions in response to Russia's invasion of Ukraine— could disrupt supply chains already struggling with bottlenecks and elevated costs. Food imports have become notably more expensive, increasing the risk of widespread food insecurity and social unrest (figure B1.1.2.A). Food accounts for an average of about one-third of the consumption basket in EMDEs, but considerably more in SAR and SSA (44 and 37 percent of average consumption baskets, respectively; figure B1.1.2.B). Russia and Ukraine are
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