The International Monetary Fund has warned that Nigeria and other emerging countries will likely record greater losses due to their less access to vaccines and smaller pandemic-support packages.
In a new report titled, “Healing the pandemic’s economic scars demands prompt action,” the Washington-based lender said pandemic-induced losses for both economic output and employment would be significant in coming years.
The bank made this known in its World Economic Outlook.
The report read in part, “Emerging market economies are likely to endure greater losses because they had relatively less access to vaccines and their pandemic-support packages were smaller. For many economies, the outbreak of the war in Ukraine is adding to the challenges.”
The Washington-based lender said that among the key causes of scarring from the pandemic were the prospective weak labour market recoveries in emerging market economies and the severe disruptions to schooling over the past two years across both advanced and emerging economies.
It warned that policymakers must act promptly to repair the damage from the crisis and prevent decades of diminished economic output from lost human capital.”
The report added that recessions often have lasting impacts on workers who lose jobs during the depths of the downturn.
It further read in part, “In addition to the challenges in the labor market and from schooling disruptions, there are other channels for scarring as well. For example, the increase in corporate debt and vulnerabilities in the industries hit hardest by the pandemic could also contribute to scarring by weighing on investment and productivity for years to come, according to new research presented in the IMF’s April World Economic Outlook.”
According to the IMF, time is short for limiting learning losses because education is cumulative, with each year building on the last.
The bank said this could include, for example, additional tutoring or a longer school year.
It added, “In addition, pandemic-era support measures for firms and workers that helped limit pandemic scarrings, such as credit guarantees and job retention policies, will need to be scaled back as recoveries strengthen. Doing so will help avoid holding back the reallocation of workers and resources to their most productive uses as the pandemic eases, and help foster productivity growth.”
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