The International Monetary Fund (IMF) states that among the main causes of consequences for the economy brought about by covid-19 are the weak resumption of the labor market in emerging markets and serious problems in education during the last two years, in the latter case both in the economies advanced as well as emerging.
In an analytical report and in a text on its blog, the Fund calls on policymakers to act decisively to repair the damage caused by the crisis and prevent decades of reduced economic production in the face of “loss of human capital”.
The blog review is written by Mehdi Benatiya Andaloussi, Lone Christiansen, Ashique Habib, Davide Malacrino, economists in the Fund’s Research Department.
They note that the G20 economies continue to recover, but underscore the potential for long-lasting scars that reduce the economy’s outlook compared to the pre-Covid-19 picture.
The biggest loss is concentrated in emerging countries, with less access to vaccines and less capital for aid packages. The IMF recalls that for many countries, Russia’s war in Ukraine represents an extra challenge.
The Fund’s economists point out that recessions often have a lasting impact on workers, who may struggle to find work even in an economic recovery. Prolonged time without a job also contributes to the loss of some skills and worsens economic growth as a whole, he recalls.
In the resumption of the Covid-19 shock, there is a clear difference between countries. The more advanced ones have had a strong recovery in the job market, with official support and more people vaccinated, while among the emerging ones, the economic recovery is weaker, with a strong impact also on the informal market, more widespread in the poorest nations.
After the height of the pandemic, informal work has increased, but this contains the average income of workers, says the IMF.
The IMF also highlights the impacts on education, with repercussions on the economy. Within countries, this impact is more severe for the poorest households.
For the entity, policymakers should think about responses to the problem, such as additional mentoring to try to replace these losses and a longer school year.
Source: CNN Brasil