1.26 Output Deviation from Pre-Pandemic Trend

these challenges. From subsequent waves of new FIGURE 1.26: Output Deviation from Pre-Pandemic Trend variants, it is evident that 2 Sub-Saharan Africa was more strongly affected than 0 any other region partly due to inadequate social safety nets (figure 1.26). Percent -2 While potential output in advanced economies is -4 expected to revert to its pre-pandemic trend in 2022, it will be down by -6 4.2 percent in Sub-Saharan Africa in 2023. The recovery -8 in the region involves a 2019 2020 2021e 2022f 2023f structural transformation World Advanced economies EMDEs SSA process geared towards the Source: World Bank staff projections. creation of more and better Note: EMDEs = emerging markets and developing economies; f = forecast; SSA = Sub-Saharan Africa. jobs. These jobs can be seen as the best form of social protection to shield the most vulnerable from a wide array of shocks, including the Russia-Ukraine war and climate change, while at the same reducing long-term scars from the pandemic. Mounting risk and uncertainty from short-term challenges, namely, tightening global financial conditions and the war in Ukraine, will weigh on already-stretched public finances as well as raise public debts further. The number of countries in or at risk of debt distress has increased considerably. Policies that foster resource mobilization have become urgent to reduce debt sustainability concerns and mitigate default risks. In 2023, a recovery in global demand is expected as most of the shocks dragging down the global economy dissipate. Growth in the region is expected to rebound in 2023 following improvement in global growth, elevated commodity prices, easing of austerity measures, and accommodative monetary policy as a reaction to falling inflation. In addition, supply disruptions might ease thanks to the lifting of most of the coronavirus restrictions in many countries, particularly in China. As a result, on the demand side, consumption and investment will pick up, and on the supply side, the industrial sector will grow faster. Elevated inflation, contractionary fiscal and monetary policy, supply disruptions, and growing uncertainty will affect both non-resource-rich and resource-rich countries in 2022. Non-resourcerich countries will recover from the shock in 2023, supported by the buoyant service sector, while resource-rich countries will pick up only a year later. Among resource-rich countries, oilrich countries will gain from elevated commodity prices while economic activity in metal and mineral exporters (excluding South Africa) will expand in 2023 at 5.2 percent, from 4.7 percent in 2021 and 2022.43 Of the three richest economies in the region, high oil prices will contribute to growth in Angola and Nigeria in 2023, whereas the South African economy will drag the regional

The COVID-19 pandemic left scarring effects on economic activity in Sub-Saharan Africa, which is projected at 4.2 percent below the pre-pandemic level in 2023.