1、Tommy Chrimes,Bram Gootjes,M.Ayhan Kose,and Collette Wheeler Prospects,Risks,and Policies in International Development Association(IDA)Countries The Great ReversalAdvance Edition The Great ReversalThe Great ReversalThe Great ReversalThe Great Reversal The Great ReversalThe Great ReversalThe Great Re

2、versalThe Great Reversal www.worldbank.org/en/research Prospects,Risks,and Policies in International Development Association(IDA)Countries Advance Edition The text of this advance edition is a work in progress for the forthcoming book The Great Reversal:Prospects,Risks,and Policies in International

3、Development Association(IDA)Countries.A PDF of the final book,once published,will be available at https:/openknowledge.worldbank.org/,and print copies can be ordered at .Please use the final version of the book for citation,reproduction,and adaptation purposes.2024 International Bank for Reconstruct

4、ion and Development/The World Bank 1818 H Street NW,Washington,DC 20433 Telephone:202-473-1000;Internet:www.worldbank.org This work is a product of the staff of The World Bank with external contributions.The findings,interpretations,and conclusions expressed in this work do not necessarily reflect t

5、he views of The World Bank,its Board of Executive Directors,or the governments they represent.The World Bank does not guarantee the accuracy,completeness,or currency of the data included in this work and does not assume responsibility for any errors,omissions,or discrepancies in the information,or l

6、iability with respect to the use of or failure to use the information,methods,processes,or conclusions set forth.The boundaries,colors,denominations,and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territor

7、y or the endorsement or acceptance of such boundaries.Nothing herein shall constitute or be construed or considered to be a limitation upon or waiver of the privileges and immunities of The World Bank,all of which are specifically reserved.Rights and Permissions This work is available under the Crea

8、tive Commons Attribution 3.0 IGO license(CC BY 3.0 IGO)http:/creativecommons.org/licenses/by/3.0/igo.Under the Creative Commons Attribution license,you are free to copy,distribute,transmit,and adapt this work,including for commercial purposes,under the following conditions:AttributionPlease cite the

9、 work as follows:World Bank.2024.The Great Reversal:Prospects,Risks,and Policies in International Development Association(IDA)Countries.Washington,DC:World Bank.License:Creative Commons Attribution CC BY 3.0 IGO TranslationsIf you create a translation of this work,please add the following disclaimer

10、 along with the attribution:This translation was not created by The World Bank and should not be considered an official World Bank translation.The World Bank shall not be liable for any content or error in this translation.AdaptationsIf you create an adaptation of this work,please add the following

11、disclaimer along with the attribution:This is an adaptation of an original work by The World Bank.Views and opinions expressed in the adaptation are the sole responsibility of the author or authors of the adaptation and are not endorsed by The World Bank.Third-party contentThe World Bank does not ne

12、cessarily own each component of the content contained within the work.The World Bank therefore does not warrant that the use of any third-party-owned individual component or part contained in the work will not infringe on the rights of those third parties.The risk of claims resulting from such infri

13、ngement rests solely with you.If you wish to reuse a component of the work,it is your responsibility to determine whether permission is needed for that reuse and to obtain permission from the copyright owner.Examples of components can include,but are not limited to,tables,figures,or images.All queri

14、es on rights and licenses should be addressed to World Bank Publications,The World Bank Group,1818 H Street NW,Washington,DC 20433,USA;e-mail:pubrightsworldbank.org.Cover image:Getty Images.Used with the permission of Getty Images.Further permission required for reuse.Cover design:Adriana Maximilian

15、o,World Bank Group The cutoff date for the data used in the report was April 1st,2024.acceleration of economic development which will promote higher standards of living and economic and social progress in the less-developed countries is desirable not only in the interests of those countries but also

16、 in the interests of the international community as a whole International Development Association Articles of Agreement September 24,1960 At its founding,the International Development Association was charged with a simple yet noble missionto raise standards of living and build momentum for growth in

17、 developing countries.But the landscape we face today is far more complex:declining progress in our fight against poverty,an existential climate crisis,food insecurity,fragility,a fledgling pandemic recovery,and conflict that touches lives beyond the frontlines.Ajay Banga World Bank Group President

18、Remarks at the IDA Midterm Review December 6,2023 vii Contents Acknowledgments.ix Authors.xi Abbreviations.xiii Overview.1 I.Introduction.7 II.Characteristics of IDA countries.15 III.Recent developments amid overlapping crises:2020-23.23 IV.Near-term growth prospects:2024-25.35 V.Output losses,growt

19、h,convergence,and poverty.41 VI.Risks to the outlook.49 VII.Natural resources and demographic dividends.55 VIII.Investment needs and policies.63 IX.Domestic policy priorities.71 X.Global support.83 XI.Conclusion.89 Appendix.95 References.102 Figures 1 IDA countries:prospects,risks,and policies.5 2 C

20、haracteristics of IDA countries.18 3 Characteristics of IDA countries(continued).19 4 Characteristics of IDA countries(continued).21 5 Macroeconomic developments:activity.27 6 Inflation,commodity prices,and food insecurity.29 viii 7 Fiscal accounts.30 8 External accounts .33 9 Near-term prospects.38

21、 10 Output losses and growth.44 11 Per capita income growth.46 12 Extreme poverty.47 13 Risks.53 14 Demographic and resource dividends.59 15 Investment needs and accelerations.66 16 Fiscal and monetary policy challenges.75 17 Learning losses and gender gaps.79 18 Global support.86 Tables 1 GDP growt

22、h.26 2 GDP growth per capita.45 A.1 Characteristics of IDA countries.95 A.2 IDA graduates.99 ix Acknowledgments This study is a publication of the Prospects Group and was produced under the general guidance of Indermit Gill.Indermits feedback and constant support helped deepen the analysis presented

23、 here.The publication has only been possible because of many brilliant colleagues.Lorz Qehaja has provided exceptional and indefatigable research assistance,conducting data work and statistical analysis along with the impressive Shijie Shi and Vasiliki Papagianni.Excellent research support was also

24、provided by Mattia Coppo,Franco Diaz Laura,Maria Hazel Macadangdang,Matias Ignacio Guerra Urzua,Rafaela Martinho Henriques,Urja Singh Thapa,and Kaltrina Temaj.Feedback from various experts has helped shape and enhance our work.This has included insightful views from Masood Ahmed,Timothy Callen,Sanje

25、ev Gupta,Graham Hacche,Edith Kikoni,Timothy Lane,Akihiko Nishio,James Rowe,Raju Singh,and Rudi Steinbach.Their perspectives and wisdom have been invaluable.We also received helpful reviews and specific inputs from Joseph Mawejje,Kate McKinnon,Valerie Mercer-Blackman,and Kersten Stamm,as well as key

26、thematic contributions from John Baffes,Samuel Hill,Dominik Peschel,Naotaka Sugawara,and Hamza Zahid.Reina Kawai,Dohan Kim,Jiwon Lee,and Takuma Tanaka provided incisive additional reviews.We are thankful to our colleagues in the Prospects Group who provided thoughtful early feedback at an internal s

27、eminar.We are grateful to Joseph Rebello for his considered suggestions throughout the process,and to him,Nandita Roy,Kristen Milhollin,and Mariana Lozzi Teixeira for managing media relations and social media outreach.We thank Graeme Littler for editorial and web support.We owe a particular debt of

28、gratitude to Adriana Maximiliano for her outstanding work coordinating the print publication,in collaboration with Jason Barrett and Onyekachi Wosu.xi Authors Tommy Chrimes is a Senior Economist in the World Bank Groups Prospects Group.Previously,he served as an Advisor to the UK Executive Directors

29、 at the International Monetary Fund and World Bank Group Executive Boards.Before that,he worked for the UK civil service in various international economics and policy roles.Bram Gootjes is an Economist in the World Bank Groups Prospects Group.Previously,he worked as a Researcher in the Department of

30、 Global Economics and Management at the University of Groningen in the Netherlands.M.Ayhan Kose is Deputy Chief Economist of the World Bank Group and Director of the World Bank Groups Prospects Group.He previously worked in the Research and Western Hemisphere Departments of the International Monetar

31、y Fund.He is a Nonresident Senior Fellow at the Brookings Institution,a Research Fellow at the Centre for Economic Policy Research,a Deans Fellow at the University of Virginias Darden School of Business,and a Research Associate at the Center for Applied Macroeconomic Analysis.Collette Wheeler is a S

32、enior Economist in the World Bank Groups Prospects Group.Previously,she worked in the World Bank Groups Macroeconomics,Trade,and Investment Global Practice for the Europe and Central Asia region.Prior to that,she worked in economic consulting.xiii AE CPI DSA EAP ECA EMBI EMDEs FCS FDI FY GDP GEP GFC

33、 GNI GNFC IBRD IDA ILO IMF LAC LIC LMC MNA OECD RHS SAR SS SSA TFP WDI advanced economy consumer price index debt sustainability analysis East Asia and Pacific Europe and Central Asia Emerging Market Bond Index(J.P.Morgan)emerging market and developing economies fragile and conflict-affected situati

34、ons foreign direct investment fiscal year gross domestic product Global Economic Prospects global financial crisis gross national income goods and nonfactor services International Bank for Reconstruction and Development International Development Association International Labour Organization Internat

35、ional Monetary Fund Latin America and the Caribbean low-income country lower-middle-income country Middle East and North Africa Organisation for Economic Co-operation and Development right-hand scale South Asia small states Sub-Saharan Africa total factor productivity World Development Indicators Ab

36、breviations Overview For the worlds most vulnerable countries,the outlook is bleak.The World Banks International Development Association(IDA)provides impactful support to the poorest and most vulnerable countries in the world.The 75 economies currently eligible for low-interest loans and grants from

37、 IDA account for just under one-quarter of the global population but over 70 percent of the worlds extreme poor and only 3 percent of global output.They faced significant challenges long before the COVID-19 pandemic.Yet they had made notable progress on several key development indicators in recent d

38、ecades:on access to basic services,life expectancy,and poverty reduction,for example.Their debt vulnerabilities,however,continued to increase,along with structural concerns.These persistent challenges are holding back progress and threatening to erode it.Significant gaps remain across a broad range

39、of development metrics.Amid overlapping crises,IDA countries face their weakest recovery in decades.The development challenges confronting IDA countries have been compounded by the overlapping crises of the past four years.The emergence of COVID-19 saw GDP growth in these countries fall to 0.3 perce

40、nt in 2020the lowest rate recorded since the early 1980s.Their weakness was broad-based but small states experienced particularly sharp contractions.The recovery since 2020 has been undermined by other shocks,including conflicts,a sharp increase in global inflation,a rapid rise in interest rates,and

41、 a tightening in global financial conditions.Sovereign spreads for IDA countries increased markedly relative to other emerging market and developing economies(EMDEs).External financial flows to these countries also fell in 2022.In the near term,growth in IDA countries is expected to remain subdued,w

42、ith 2020-24 set to be the weakest half-decade of growth since the early 1990s(figure 1).The combination of pre-pandemic vulnerabilities,recent overlapping crises,and wider problemsincluding the effects of climate change and increases in violence and conflictis weighing heavily on these countries eco

43、nomic and social development.4 IDA COUNTRIES THE GREAT REVERSAL A historic reversal in development is underway.Amid stunted economic recoveries,one in three IDA countries is poorer now than on the eve of the pandemic.Over the five years from 2020 to 2024,half of IDA countries are set to see their pe

44、r capita income differentials relative to advanced economies widen.The pandemic has undone three years of progress and other crises have taken a heavy toll on poverty reduction.In 2023,the share of people living in extreme poverty in these countries is estimated to have been more than eight times th

45、at in the rest of the world.These countries account for 92 percent of the worlds food-insecure people,after a doubling of their food-insecure populations since 2019.Half of IDA countries are currently in debt distress or at high risk of it.Stagnation could become more entrenched,with a danger of dee

46、per reversals.The key risk is that the current weak trajectory for IDA countries persists or deteriorates,leading to a lost decade in development.IDA countries are particularly exposed to climate change-related natural disasters,which have become more common and costlier over time.Instances of viole

47、nce and conflict have also increased sharply in many IDA countries in recent years;they pose a further threat to economic stability and growth.Global headwinds make progress harder to achieve.Any further weakening in long-term global growth prospects would likely weigh heavily on the already subdued

48、 outlook for IDA countries.An escalation in geopolitical tensions,fragmentation of trade and investment networks,and weaker-than-expected near-term growth in major economies could impede growth in IDA countries.A protracted period of tighter financial conditions would worsen fiscal and external imba

49、lances.Dependence on a narrow range of exports,limited fiscal space,and constrained access to financial markets make IDA countries particularly exposed to external shocks.IDA countries have high economic potential that can be unlocked.History offers many examples of IDA countries that overcame multi

50、faceted development challenges.Large economies such as China,India,and the Republic of Korea successfully graduated from IDA and are now important engines of the global economy.Current IDA countries have important attributes that can be harnessed to help generate future growth and development.Many o

51、f them possess abundant natural resources,including substantial reserves of minerals critical to the global energy transition.Many also have the potential to IDA COUNTRIES 5 THE GREAT REVERSAL FIGURE 1 IDA countries:prospects,risks,and policies IDA countries are set to experience,in 2020-24,the weak

52、est half-decade of growth since the early 1990s,halting per capita income catch-up relative to advanced economies in over half of them.Progress in reducing extreme poverty has stalled and food insecurity has surged.IDA countries have the potential to reap large demographic dividends.They need to imp

53、lement comprehensive policy packages to accelerate growth and meet large investment needs.B.Share of IDA countries with GDP per capita growth lower than in advanced economies A.GDP growth in IDA countries,annual average Sources:GRFC(database);Mahler and Lakner(2022);Stamm and Yu(2024);UN(2022a);WDI(

54、database);World Bank(2022f);World Bank Poverty and Inequality Platform;World Bank.Note:e=estimate;f=forecast.AEs=advanced economies;CHN=China;EMDEs=emerging market and developing economies;IDA=IDA-eligible countries;IND=India.B.GDP per capita aggregates are calculated as aggregated GDP divided by ag

55、gregate population.GDP aggregates are calculated using real U.S.dollar GDP weights at average 2010-19 prices and market exchange rates.C.Sample includes up to 75 IDA-eligible countries,and 83 EMDEs excluding IDA.World includes 158 countries.Poverty data from Mahler and Lakner(2022),World Bank Povert

56、y and Inequality Platform.D.Sample includes data for up to 50 IDA-eligible countries.E.Population-weighted averages.Working-age population is defined as people aged 15-64 years.Population projections come from the UN World Population prospects database.F.Bars show estimates of the annual investment

57、needs to build resilience to climate change and put countries on track to reduce emissions by 70 percent by 2050.Depending on data availability,estimates include investment needs related to transport,energy,water,urban adaptations,industry,and landscape.D.Food insecurity in IDA countries C.Extreme p

58、overty in percent of population:1990-2030 F.Investment needs for a resilient and low-carbon pathway,2022-30 E.Working-age population 02550751---192020-24Percent of IDA countries0002005200252030IDAEMDEs excl.IDAEMDEs excl.IDA,CHN

59、,INDWorld excl.IDAPercent of population00500600700200222023StressedFood crisisEmergency&worseNumber of people,millions02---192020-24fPercent0246810Low-incomeLower-middleincomeUpper-middleincomePercent of GDP per year505560657002

60、0040205020602070208020902100AEsWorldEMDEs excl.IDAIDAPercent of total population6 IDA COUNTRIES THE GREAT REVERSAL reap large demographic dividends,with working-age populations expected to surge over the next half-century.These resource and demographic endowments carry well-documented ris

61、ks but,if well-managed,represent major opportunities.Various IDA graduates made significant progress on policy reform packages and accelerated their development paths.If the current cohort of IDA countries can implement similarly comprehensive policy reforms with the necessary financial and technica

62、l support of the global community,they will be primed to better utilize their natural and human resources and make decisive progress in delivering strong,sustainable,and inclusive growth.Ambitious national policies are needed to accelerate investment growth.IDA countries need substantial investment

63、to meet their development goals,including for climate adaptation,human capital development,and digital transformation.Creating the conditions to accelerate investment growth hinges on the implementation of comprehensive policy packages.Policy makers in IDA countries need to restore fiscal sustainabi

64、lity and strengthen policy and institutional frameworks,including for effective management of natural resources.At the same time,these countries should seek to improve education and health outcomes and dismantle barriers that hamper women,youth,and other disadvantaged groups from obtaining productiv

65、e jobs,thus leveraging demographic dividends.In addition,they should undertake measures to enhance resilience,address climate-related risks,and better integrate into the global economy.By doing so,IDA countries can significantly increase the likelihood of stronger and sustained investment growth.Thi

66、s can be a catalyst for promoting income growth,accelerating poverty reduction,and bridging infrastructure gaps.Global support is essential to restart progress in development.Significant financial support from the global community is essential to enable progress in IDA countries and overcome the ser

67、ious risk of more protracted stagnation.Enhanced cooperation on global policy issuesincluding fighting climate change,facilitating more timely and effective debt restructurings,and supporting cross-border trade and investmentis also essential to help support IDA countries efforts and avert a lost de

68、cade in development.History makes clear that closing income and development gaps between the poorest and wealthiest nations benefits all economies.I.Introduction Te 75 countries eligible for low-interest loans and grants from the World Banks International Development Association(IDA)have been hit ha

69、rd by the global crises since 2020.1 A major reversal in development is underway for these countries,which are among the poorest and most vulnerable in the world.As a group,these countries are struggling through their weakest half-decade of growth since the early 1990s.A third have lower per capita

70、incomes now than in 2019.Amid stunted recoveries,more than half have seen income gaps widen relative to advanced economies since the pandemic.Progress on poverty reduction has stalled.IDA countries have seen a surge in food insecurity.Many are in debt distress.Most are also particularly exposed to t

71、he growing impacts of climate change.Fiscal positions are strained while investment needs are rising.IDA countries were already facing a raft of development challenges before the succession of crises of the past four years.But these crises,including the COVID-19 outbreak,multiple conflicts,a sharp i

72、ncrease in global inflation,elevated interest rates,and tighter global financial conditions,have compounded challenges,putting key development objectives further out of reach and leaving IDA countries particularly vulnerable to new shocks.Yet progress is still possiblenot least because these countri

73、es have significant untapped economic potential.Many IDA countries have rich natural resources and favorable demographics;leveraging these advantages effectively will require careful and concerted effort.Implementing ambitious policy packages has the potential to make a significant difference,suppor

74、ting investment accelerations to underpin growth,as has happened in many countries in the past.The challenge for national policy makers is to pursue policies that can capitalize on the economic advantages of these countries to drive strong and sustainable growth.In doing so,they will also need the s

75、upport of the global community.1 IDA,founded in 1960,aims to reduce poverty by providing zero to low-interest loans and grants to the worlds most vulnerable countries,for programs that boost economic growth,reduce inequalities,and improve peoples living conditions.10 IDA COUNTRIES THE GREAT REVERSAL

76、 Against this background,this study addresses the following questions:What are the key economic features of IDA countries?How have the overlapping global crises of the past four years affected these economies?What are the near-term economic prospects and risks for IDA countries?What are the key nati

77、onal policy interventions that can promote growth and advance development objectives in these economies?How can the global community best support IDA economies?Contributions This study approaches the 75 IDA countries as a group,while acknowledging the considerable economic diversity among them.It ma

78、kes five unique contributions.First,it considers the key features of IDA countries in the context of macroeconomic developments in the years up to 2020.Second,it presents the first comprehensive review of developments since the COVID-19 pandemic and subsequent crises,documenting how these have added

79、 to the challenges facing IDA countries.It highlights the significant output losses IDA countries have suffered and the lack of progress in poverty reduction and in the convergence of per capita incomes with the advanced economies.Third,it assesses near-term prospects for these economies and examine

80、s the important risks they face.Fourth,it considers several factors which could potentially play in these economies favor.Finally,it outlines the national and global policy interventions needed to help IDA countries tackle the challenges confronting them and capitalize on their comparative advantage

81、s.Main findings Key features.Most IDA countries have low per capita income levels:this is a primary determinant of eligibility for IDA assistance(below$1,315 in fiscal year 2024).IDA also supports some countries that are above this income threshold but lack the creditworthiness needed to borrow from

82、 the International Bank for Reconstruction and Development(IBRD),IDAs sister institution serving middle-income and credit-worthy low-income countries.High incidences of extreme poverty and considerable,longstanding development challenges are common themes among IDA countries,although there are also

83、important differences between low-income countries(LICs),fragile and conflict-affected IDA COUNTRIES 11 THE GREAT REVERSAL situations(FCS),and small states.Common characteristics include weak institutions,limited fiscal space(with modest revenue capacity and high debt vulnerabilities),persistent cur

84、rent account deficits,heavy reliance on external financial flows,exports concentrated in a handful of products,shallow financial markets,and sizeable human capital and infrastructure needs.Evolution of activity and inflation.Growth slowed across IDA countries in 2020 to 0.3 percent,the lowest annual

85、 rate recorded since the early 1980s.Within this average,there were contractions of output in IDAs FCS and also,at a double-digit average rate,in IDAs small states.IDA countries have also recorded a much weaker rebound in per capita income growth since 2021 than other EMDEs.Average headline inflatio

86、n in IDA countries rose further in 2020-22 than in other EMDEs,peaking in mid-2022,with rising food prices contributing to increased hunger.Impact of crises on IDA countries.The crises of the past four years have taken a massive toll on IDA countries.Output fell 4 percent below pre-pandemic trends i

87、n 2020 and output losses are projected to reach 5.7 percent in 2024.By the end of 2024,IDA countries are expected to have experienced the weakest half-decade of growth since the early 1990s.There is set to be almost no change in their per capita income growth differential with advanced economies on

88、average over 2020-24,and half of IDA countriesthe largest share since the start of this centurywill have been growing more slowly in per capita terms on average than wealthy economies over that period.This is widening the income gap between these countries and advanced economies.Moreover,progress on

89、 poverty reduction has stalledthe pandemic erased three years of progress in terms of reducing the extreme poverty rate.Poverty is expected to fall only very gradually out to 2030.It is estimated that 26.5 percent of the population in IDA countries was living in extreme poverty in 2023,over eight ti

90、mes the proportion in the rest of the world.About 651 million people in IDA countries faced food insecurity in 2023,nearly double the 2019 number and 92 percent of the global total.Near-term prospects.A modest increase in growth in IDA countries is expected during 2024-25,but overall,activity is pro

91、jected to remain subdued relative to the 2010-19 average growth rate.Inflation is forecast to moderate further but to remain higher than in other EMDEs and above IDA countries pre-pandemic average.While there are signs of a tentative recovery in trade and investment growth,they are expected to remai

92、n muted relative to development needs.In sum,growth in the next few years is expected to be insufficient to significantly improve the development trajectory of IDA countries.12 IDA COUNTRIES THE GREAT REVERSAL Risks.The key risk to the outlook for IDA countries is that the current stagnation becomes

93、 more protracted.If weak income growth persists,deeper reversals in progress could occur.IDA countries are especially susceptible to natural disasters associated with climate change.Fragility and conflict-affected IDA countries are particularly vulnerable to new shocks given their weak fundamentals.

94、Risks are magnified by the highly challenging external environment:weaker-than-expected global growth,an escalation in geopolitical tensions,fragmentation of trade and investment networks,or an extended period of tighter global financial conditions could further darken prospects for IDA countries.Re

95、asons for optimism.While IDA countries face a wide range of challenges,there are also factors in their favor.First,progress is possible.Since 2000,a dozen countries have successfully graduated from IDA.Large economies such as China,India,and the Republic of Korea were once IDA countries.Second,many

96、IDA countries have rich natural resources and favorable demographic profiles,although both advantages need to be managed effectively for their potential to be realized.IDA countries possess abundant supplies of various commodities,with many having substantial reserves of minerals critical to the glo

97、bal energy transition.Working-age populations in IDA countries are expected to expand over the next half-century,unlike in the rest of the world.If these advantages can be harnessed,they should significantly benefit economic growth and development.Third,experience shows that it is possible to accele

98、rate investment growth and deliver transformative structural change by undertaking comprehensive policy reforms.National policy priorities.To confront these challenges and risks effectively,IDA countries need to implement well-designed and ambitious policies,focused particularly on boosting investme

99、nt growth.These should include policies to durably improve fiscal and external imbalances,secure macroeconomic stability,and advance an array of structural reformsincluding to strengthen institutions,better manage natural resources,boost human capital,enhance gender equality and youth inclusion,and

100、combat climate change.Implementation of these policies has the potential to spark an extended period of strong investment growth,which is necessary to meet substantial investment needs,promote income growth,accelerate poverty reduction,and address infrastructure gaps(including in relation to climate

101、 change and digital transformation).Global support.Strong and sustained financial support from the international community is vital to help contain the risks IDA countries face,address crises that occur should risks materialize,and unlock opportunities.It is also critical IDA COUNTRIES 13 THE GREAT

102、REVERSAL that the global community redoubles international cooperation efforts,particularly in support of IDA countries,on several fronts:to counter the impacts of climate change via coordinated mitigation and adaptation efforts;to combat fragmentation and support international trade and investment,

103、as a significant growth engine for many IDA countries;to ensure more timely and effective debt restructurings for developing countries which need them;and to buttress IDA countries domestic development efforts with a view to building shared and sustainable prosperity.Effective global support and coo

104、peration are essential for IDA countriesand progress in IDA countries is critical for long-term global peace and prosperity.II.Characteristics of IDA countries Each IDA country is unique,yet many share common characteristics which tend to hinder their development efforts and increase their vulnerabi

105、lity to shocks.Low per capita income.Most IDA countries have notably low income levels.A primary criterion for IDA assistance eligibility is a countrys relative poverty.Thirty-one of IDAs 75 countries have per capita Gross National Income(GNI)below$1,315.2 Other IDA countries surpass this income thr

106、eshold but lack the creditworthiness to borrow from the IBRD.3 Among IDA countries,one-third are classified as low-income countries(LICs).4 The remaining two-thirds predominantly comprise lower-middle-income countries(LMCs).A few IDA-eligible small states are categorized as having higher income leve

107、ls(figure 2.A).Large population,small share of global output.With 1.9 billion inhabitants,IDA countries are home to almost one-quarter of the global populationa share that is growing.Geographically,more than half of IDA countries are in Sub-Saharan Africa,while nearly 20 percent are in East Asia and

108、 the Pacific,where many are small states(figure 2.B).In South Asia,all countries except India are IDA countries.Despite their significant combined population,IDA countries collectively account for just three percent of global output(figure 2.C).5 Widespread extreme poverty,heightened fragility.Over

109、70 percent of the worlds extreme poor reside in IDA countries,with nearly 500 million people living below the extreme poverty line of$2.15 per person a day in 2023.This level of poverty affected,on average,26.5 percent of the population in IDA countries in 2023,a rate over eight times higher than th

110、e average of 3.1 percent 2 IDA uses this threshold of$1,315 for the fiscal year ending June 30,2024.Some IDA-eligible countries,such as Nigeria and Pakistan,are also creditworthy for some IBRD borrowing;these are referred to as“blend”countries,and they are also among the 75 countries currently eligi

111、ble for IDA resources and considered in this study.Table A.1 provides a list of classifications of IDA countries.3 In 2023,per capita income in IDA countries ranged from$222 in Burundi to$30,899 in Guyana.Per capita income in Guyana has surged in recent years,from$6,309 in 2019,owing to the extracti

112、on of recently discovered oil.Across EMDE regions,Sub-Saharan Africa has the lowest income per capita income,averaging$1,352,while Europe and Central Asia has the highest,at$2,273.4 All LICs,with the exception of the Democratic Peoples Republic of Korea,are IDA-eligible countries.5 LICs and FCS cont

113、ribute a mere 0.5 percent and 1.1 percent to global GDP,respectively.IDAs small states have a marginal share of global output,while IDAs commodity exporters collectively account for 1.9 percent of global GDP.18 IDA COUNTRIES THE GREAT REVERSAL observed in the rest of the world.Most of those living i

114、n extreme poverty are in Sub-Saharan Africa(figure 2.D).Moreover,many IDA countries are characterized by heightened vulnerabilities attributable to institutional fragility,social unrest,and conflict.Thirty-three IDA countries are classified as fragile or conflict-affected,with 324 million individual

115、s living in extreme poverty within this group.In total,over 35 percent of the population in IDAs fragile or conflict-affected states were estimated to have endured extreme poverty in 2023,while 43 percent of the people in IDAs LICs live in extreme poverty.A significant number of IDA countries are ca

116、tegorized as LICs and FCS.FIGURE 2 Characteristics of IDA countries IDA countries have low per-capita incomes and high extreme poverty rates.They account for almost a quarter of the global population,but contribute only a small fraction to global output.Many IDA countries are in Sub-Saharan Africa,w

117、here most of the worlds poor reside.B.Regional distribution of IDA countries A.IDA country classifications Sources:Mahler and Lakner(2022);World Bank Poverty and Inequality Platform;World Bank.Note:EAP=IDA East Asia and Pacific;ECA=IDA Europe and Central Asia;FCS=IDA fragile and conflict-affected si

118、tuations;IDA=IDA-eligible countries;LAC=IDA Latin America and the Caribbean;LICs=IDA low-income countries;LMCs=IDA low-and middle-income countries;MNA=IDA Middle East and North Africa;SAR=IDA South Asia;SS=IDA small states;SSA=IDA Sub-Saharan Africa.A.Classification is for the 2023-24 fiscal year.D.

119、Bars show the number of people living below the definition of extreme poverty of$2.15 a day.Data from Mahler and Lakner(2022)and Poverty and Inequality Platform.D.Extreme poverty across groups of IDA countries,2023 C.Share of global output,2015-23 010203040SSAEAPLACSARECAMNANumber of IDA countries01

120、234IDALICsFCSSSCommodityexportersPercent of global output00500SSA MNA SAR ECA EAP LAC FCS LICs LMCsRegionNumber of people,millions020406080LICsLMCsSSFCSCommodityexportersPercent of IDA countriesIDA COUNTRIES 19 THE GREAT REVERSAL Less open to trade.IDA countries engage in less internation

121、al trade,relative to GDP,than other EMDEs(figure 3.A).Specifically,trade-to-GDP ratios averaged about 66 percent over 2021-22 in IDA countries,less than the 82 percent of GDP in other EMDEs.This gap is even more pronounced in IDAs LICs,where trade openness averaged only 57 percent of GDP.Conversely,

122、IDAs small states demonstrate significantly higher levels of trade openness,with an average exceeding 93 percent of GDP.Undiversified production and exports.Output and exports of IDA countries tend to be concentrated in a narrow range of products.On average,about 40 FIGURE 3 Characteristics of IDA c

123、ountries(continued)IDA countries exhibit relatively low levels of trade openness coupled with significant concentration in goods exports.The vulnerability of IDA countries to climate change is underscored by the number of people affected and substantial damages caused by natural disasters.B.Vulnerab

124、ility to climate risk in IDA countries by region,2017-21 average A.Trade openness and goods exports concentration,2021-22 average Sources:EM-DAT(database);Notre Dame Global Adaptation Initiative;UNCTAD;UNU-WIDER;WDI(database);World Bank.Note:EAP=IDA East Asia and Pacific;ECA=IDA Europe and Central A

125、sia;EMDEs=emerging market and developing economies;IDA=IDA-eligible countries;LAC=IDA Latin America and the Caribbean;MNA=IDA Middle East and North Africa;SAR=IDA South Asia,SSA=IDA Sub-Saharan Africa.A.Trade openness shows the sum of exports and imports.Sample includes 49 IDA-eligible countries and

126、 63 EMDEs excluding IDA.Goods exports concentration index measures the degree to which a countrys exports are composed of a small number of commodities.Sample includes 74 IDA-eligible countries and 78 EMDEs excluding IDA.B.Aggregates are computed using 2015 GDP as weights.B.C.Regional aggregates inc

127、lude only IDA countries.D.Costs of natural disasters,annual average C.Number of people affected by natural disasters in IDA countries by region,2013-22 average 0.00.10.20.30.40.50.6SARSSAEAPMNALACECAEMDEs excl.IDA averageIndex02468055SAREAPSSALACMNAECATotal affectedTotal share of populati

128、on affected(RHS)Number of people,millionsPercent0.00.51.01.5IDAEMDEs excl.IDAAdvancedeconomies-10Percent of GDP0.020.040.060.0406080100IDAEMDEsexcl.IDAIDAEMDEsexcl.IDATradeopennessGood exportsconcentration(RHS)MedianAveragePercent of GDPIndex,100=most concentrated20 IDA COUNTRIES THE GREA

129、T REVERSAL percent of goods exports from IDA countries are from a single sector,well above the 27 percent average in other EMDEs.As documented in Section VII,most IDA countries have significant natural resources and rely heavily on income from commodities,with 52 IDA countries classified as commodit

130、y exporters.6 However,IDAs commodity importers and exporters alike rely heavily on food and fuel imports,highlighting the vulnerabilities and challenges they face from the volatility of commodity prices.Many IDA countries,particularly small states,attract substantial tourist flows,with over half of

131、IDA small states classified as tourism-reliant.7 Exposure to climate change-related and other natural disasters.Vulnerability to climate change-related and other natural disasters is a pressing concern for IDA countries.Climate change in particular poses growing threats to lives,livelihoods,and econ

132、omic stability(figure 3.B;Casey,Fried,and Goode 2023).Because of climate change,the frequency and severity of natural disasters are on the rise worldwide,with people in IDA countries bearing the brunt of extreme weather events(figure 3.C).Economic losses from natural disasters in these countries are

133、 substantial and have risen significantly over time,averaging 1.3 percent of GDP over 2011-2022considerably higher than in other EMDEs(figure 3.D).LICs and small states,often with limited resources,are particularly vulnerable to the effects of climate change,including droughts,floods,and rising sea

134、levels(Jafino et al.2020;Kenworthy,Kirby,and Vorisek 2023).Climate change also disproportionately impacts the agricultural sector,which is crucial for many IDA countries.Beyond economic losses,extreme weather events can significantly affect food security and livelihoods,especially in FCS(FAO et al.2

135、023).Pervasive development gaps despite progress.Human development indicators show significant progress in IDA countries in recent decades.Life expectancy,for example,rose from 58 to 65 years between 2000 and 2021.Maternal mortality rates decreased by about half,from one in every 188 live births in

136、2000 to one in 332 in the latest data(2020).Nevertheless,key indicators also reveal persistent gaps with other EMDEs(figures 4.A and 4.B).In IDA countries,life expectancy is approximately seven years lower than other EMDEs,maternal mortality rates are five times higher,and malnutrition and child mor

137、tality rates remain high.IDA countries also lag in access to physical and digital 6 Among IDA countries,11 are energy exporters,with 10 primarily exporters of oil;17 are metal exporters;while 28 are categorized as commodity exporters because of sizable shares of agricultural exports.7 Tourism-relian

138、t countries are defined as those with inbound tourism expenditure as a share of GDP during 2015-19 above the 3rd quartile of shares in all EMDEs,based on the UN World Tourism Organization data.IDA COUNTRIES 21 THE GREAT REVERSAL FIGURE 4 Characteristics of IDA countries(continued)Despite progress ac

139、ross various human development indicators in recent decades,IDA countries continue to trail other economies,particularly for maternal and early childhood mortality rates.They continue to grapple with weak institutions,high informality,and limited government revenues,including relative to other EMDEs

140、.B.Early childhood stunting and mortality rate A.Life expectancy and maternal mortality Sources:Elgin et al.(2021);International Country Risk Guide(ICRG)database;IMF-WEO(database);WHO(database);WDI(database);World Bank.Note:EMDEs=emerging market and developing economies;IDA=IDA-eligible countries.A.

141、Data show simple averages for an unbalanced sample of 74 IDA-eligible countries,79 EMDEs excluding IDA,and 38 advanced economies.“Latest”refers to 2021 for life expectancy and to 2020 for maternal mortality.B.Data show simple averages for 75 IDA-eligible countries,79 EMDEs excluding IDA,and 36 advan

142、ced economies for mortality rate,and 70 IDA-eligible countries,72 EMDEs excluding IDA,and 14 advanced economies for stunting.“Latest”refers to 2021 for mortality rate and to 2022 for stunting.C.Average percentage of population,based on WDI data.Latest refers to 2021 for electricity and internet,and

143、2022 for basic sanitation.Electricity:unbalanced sample of 74 IDA-eligible countries,79 EMDEs excluding IDA,and 37 advanced economies.Internet:unbalanced sample of 64 IDA-eligible countries,75 EMDEs excluding IDA,and 37 advanced economies.Basic sanitation:unbalanced sample of 42 IDA-eligible countri

144、es,47 EMDEs excluding IDA,and 34 advanced economies.D.Panel shows ICRG scores for Bureaucracy Quality and Law and Order.Indexes are normalized to unity.Sample includes 38 IDA countries,62 EMDEs excluding IDA,and 36 advanced economies.E.Estimates of informal output based on calculations from a dynami

145、c general equilibrium model(percent of official GDP).Bars show the results for 53 IDA countries and 68 other EMDEs excluding IDA.Panel shows 2010-20 average.Whiskers show interquartile range.F.General government total revenues and expenditures for 2023.Whiskers show interquartile range.Sample includ

146、es 71 IDA-eligible countries and 77 EMDEs excluding IDA.D.Institutional quality C.Access to infrastructure E.Informal output,2010-20 F.Government revenues and expenditures,2023 0255075602000Latest2000LatestPrevalence of stuntingMortality rate,under-5(RHS)IDAEMDEs excl.IDAAdvanced economie

147、sPercent of children under 5Per 1,000 live births02550751002000Latest2000Latest2000LatestBasic sanitationInternetElectricityIDAEMDEs excl.IDAAdvanced economiesPercent of population0.00.20.40.60.81.0IDAEMDEsexcl.IDAAdvancedeconomiesIDAEMDEsexcl.IDAAdvancedeconomiesBureaucracy qualityLaw and orderInde

148、x,0-4005006004050607080901002000Latest2000LatestLife expectancyMaternal mortality(RHS)IDAEMDEs excl.IDAAdvanced economiesYearsPer 100,000 live births010203040IDAEMDEs excl.IDAIDAEMDEs excl.IDAGovernmentrevenuesGovernment expendituresMedianAveragePercent of GDP01020304050IDAEMDEs excl.IDAM

149、edianAveragePercent of GDP22 IDA COUNTRIES THE GREAT REVERSAL infrastructure:although access to basic sanitation,electricity,and the internet has improved substantially in IDA countries since 2000,it is still much lower than in other EMDEs(figure 4.C).Weak institutions.IDA countries generally have w

150、eaker institutions than other EMDEs(figure 4.D).This institutional weakness is broad in scope,including tenuous legal capacity for protecting property rights,the persistence of political violence,state and market failures,weak governance,and corruption.Moreover,the presence of important natural reso

151、urce endowments in many IDA countriesa potential booncan impede economic diversification while breeding corruption and conflict(Gill et al.2014;World Bank 2017).These issues heighten country risk profiles,hindering capital inflows.Limited institutional capacity also impacts data availability and qua

152、lity,complicating policy design and implementation.High informality,limited fiscal space.In the typical IDA country,the informal economy constitutes a sizable share of GDP36 percent over 2010-20,compared with 29 percent in other EMDEs(figure 4.E).This widespread informality constrains government rev

153、enue mobilization efforts,which in turn hampers the governments capacity to deliver key public services(figure 4.F;Gaspar,Jaramillo,and Wingender 2016).In 2021,tax revenue in IDA countries averaged only 11.9 percent of GDP(much lower than the 17.1 percent in other EMDEs),significantly limiting the r

154、esources available for public investment and social programs.Consequently,spending on critical sectors like health and education remains notably lower than in other EMDEs,averaging 1.6 and 3.6 percent of GDP,respectively,over 2000-20 across IDA countriessignificantly below the 2.9 and 4.1 percent in

155、 other EMDEs.Persistent twin deficits,underdeveloped financial sectors.In many IDA countries,sizable and persistent twin(fiscal and current account)deficits prevail.These deficits are often accompanied by elevated levels of debt.Countries rely heavily on external sourcesincluding remittancesto meet

156、their financing needs.Moreover,domestic financial sectors in these economies tend to be underdeveloped,with limited capacity for conducting basic intermediation transactions linking savers and borrowers.Shallow and illiquid financial systems,lacking diverse instruments,leave IDA countries ill-equipp

157、ed to absorb and mitigate the impact of adverse shocks(Sahay et al.2015).III.Recent developments amid overlapping crises:2020-23 In 2020,during the global recession triggered by the COVID-19 pandemic,GDP growth in IDA countries fell to its slowest pace since the early 1980s.The subsequent recovery h

158、as been impeded by further crises associated with the Russian Federations invasion of Ukraine,the sharp increase in global inflation,the associated tightening of monetary policy,and constrained financing options.Output growth Growth in IDA countries fell to 0.3 percent in 2020the slowest pace record

159、ed since the early 1980sas disruptions to domestic activity associated with the COVID-19 pandemic were worsened by sharply lower external demand,a collapse in tourism activity,and weaker capital flows(table 1;figures 5.A and 5.B).Falling prices of industrial commoditiesparticularly oilalso hampered

160、activity in some of IDAs commodity exporters.The initial impact of the pandemic varied considerably among groups of IDA countries:in IDAs LICs,growth slowed to 1.5 percent in 2020about one third its 2010-19 average pace;in IDAs FCS,output contracted by 1.5 percent,reflecting these countries weak sta

161、te capacity and limited fiscal space;hardest hit were IDAs small states,with output shrinking by 12.4 percent in 2020 as international travel and tourism collapsed.8 In 2021,IDA countries recorded a much weaker rebound from the pandemic than other EMDEs.Growth in IDA countries strengthened from 0.3

162、percent in 2020 to 4.7 percent in 2021,supported by improvements in global trade and commodity prices.In other EMDEs,by contrast,growth rose to 7.3 percent in 2021,after a 1.5 percent contraction in 2020,as economic reopening and vaccine deployment in some larger economies supported a recovery in co

163、nsumer and business confidence,lifted services activity,and buttressed financial market sentiment.9 Although growth in IDAs small states rebounded to 6.2 percent in 8 The initial impact of the pandemic also varied considerably among IDA countries.Output fell by nearly one-third in the Maldives,one-q

164、uarter in Saint Lucia,and one-fifth in Cabo Verde in 2020,as tourism plummeted.But growth in 2020 was relatively resilient in more diversified economies,such as Ethiopia and Bangladesh.In Guyana,idiosyncratic factors,such as the discovery of crude oil,resulted in a pronounced pick-up in growth in 20

165、20.9 In some IDA countries,such as Honduras,the rebound in growth in 2021 also reflected recoveries from the previous years hurricanes.26 IDA COUNTRIES THE GREAT REVERSAL 2021,this was still weaker than the recovery in other EMDEs,as services trade remained depressed by continuing travel restriction

166、s.10 In IDAs LICs and FCS,the recovery was weaker than the IDA average,with growth reaching only 4.1 percent in LICs and 2.4 percent in FCS.This weaker recovery reflected very low vaccination rates,limited policy support for demand and activity,and a deterioration in security in many countries(World

167、 Bank 2022a).11 IDA countries growth in 2022-23 disappointed further,slowing to 4.2 percent in 2022 and an estimated 3.7 percent in 2023.This performance was similar to other EMDEs,but well below IDA countries average growth of 4.8 percent over 2010-19.The slowdown in 2023 was largely due to weakeni

168、ng domestic demand growth amid sharp rises in the cost of living,tight financial conditions,and worsening conflict,violence,and instability in some cases.Net exports contributed positively to growth in 2023,but owing to import compression reflecting weak domestic demand rather than to burgeoning exp

169、orts.10 Growth in 2021 rebounded more strongly in some tourism-dependent IDA countries,such as the Maldives,as a result of earlier economic reopening.11 A marked deterioration in security and/or political stability triggered double-digit contractions in output in 2021 in some IDA countries,including

170、 Afghanistan and Myanmar.TABLE 1 GDP growth 2010-19 average 2020 2021 2022 2023e 2024f 2025f IDA 4.8 0.3 4.7 4.2 3.7 4.3 4.5 IDA only 5.6 0.9 4.6 4.8 4.3 5.1 5.3 IDA blend 4.0-0.3 4.8 3.5 2.8 3.3 3.5 IDA LICs 4.7 1.5 4.1 5.0 3.8 4.9 5.3 IDA MICs 4.9 0.0 4.8 3.8 3.4 3.9 4.3 IDA FCS 4.2-1.5 2.4 3.9 2.

171、9 3.6 3.8 IDA SS 3.7-12.4 6.2 8.1 4.5 4.1 4.2 Other aggregates Advanced economies*2.0-4.0 5.5 2.6 1.5 1.4 1.6 EMDEs*5.1-1.5 7.1 3.7 4.2 3.9 4.1 EMDEs excl.IDA 5.1-1.6 7.3 3.7 4.2 3.8 4.0 Source:World Bank.Note:e=estimate;f=forecast.FCS=fragile and conflict-affected situations;LICs=low-income countri

172、es;MICs=middle-income countries(includes lower-middle income and upper-middle income countries);SS=small states.World Bank forecasts are frequently updated based on new information.Consequently,projections presented here may differ from those contained in other World Bank documents,even if basic ass

173、essments of countries prospects do not differ at any given date.Aggregate growth rates are calculated using GDP weights at average 2010-19 prices and market exchange rates.Aggregate growth rates exclude Afghanistan,Lebanon,Somalia,the Syrian Arab Republic,and the Republic of Yemen because of a high

174、degree of uncertainty.Aggregate growth rates for IDA small states exclude Guyana.IDA sample includes 71 economies.*The numbers presented for advanced economies and EMDEs reflect preliminary working assumptions and are subject to change.The World Bank Group publishes official forecasts for advanced e

175、conomies and EMDEs only in January and June.IDA COUNTRIES 27 THE GREAT REVERSAL Although the current estimate of growth in IDA countries in 2023 is above the January estimate,for almost half of IDAs low-income and fragile economies growth estimates have been revised down.Pervasive violence and polit

176、ical instability exacerbated the challenging economic and humanitarian situations in many of these countries last year,weighing on growth.12 Additionally,extreme weather events have had catastrophic consequences in several IDA countries,especially in LICs in the Sahel region,which is warming faster

177、than the global average and is also particularly susceptible to desertification(World Bank 2022b).FIGURE 5 Macroeconomic developments:activity GDP growth in IDA countries fell to 0.3 percent in 2020the slowest rate of growth recorded since the early 1980s.Though the initial hit to GDP was smaller fo

178、r many IDA countries than for other EMDEs,some IDA country groups suffered more.Activity in IDAs LICs and FCS disappointed last year,with substantial downgrades to growth estimates in both groups.The recovery in trade growth beyond 2021 has been muted,though is forecast to pick up somewhat in the co

179、ming years.B.GDP growth A.GDP growth trends in IDA countries Sources:Haver Analytics;World Bank;World Bank Macro Poverty Outlook(database).Note:e=estimate;f=forecast.EMDEs=emerging market and developing economies;FCS=IDA fragile and conflict-affected situations;IDA=IDA-eligible countries;LICs=IDA lo

180、w-income countries;SS=IDA small states excluding Guyana.A.Aggregate calculated using real U.S.dollar GDP weights at average 2010-19 prices and market exchange rates.C.Trade in goods and services is measured as the average of export and import volumes.D.Investment growth refers to gross fixed capital

181、 formation.Investment growth numbers from the January 2024 Global Economic Prospects report.D.Investment growth C.Trade growth -8-4048IDALICsFCSSSEMDEsexcl.IDA2020202120222023e2010-19 averagePercent-15/-10-50502120222023e2020202120222023eIDAEMDEs excl.IDA2000-19 averagePercent-20246810202

182、0202120222023e2020202120222023eIDAEMDEs excl.IDA2000-19 averagePercent-2024683192025fPercent12 For instance,Sudan faced significant deterioration,with a resumption of conflict damaging the countrys industrial base,while the decline was pronounced in Niger,mostly due

183、to a July coup and the subsequent international sanctions.28 IDA COUNTRIES THE GREAT REVERSAL Trade and investment growth Trade and investment growth were both volatile over 2020-23 in IDA countries.After trade in IDA countries contracted 3.3 percent in 2020the steepest fall since 1981it experienced

184、 a robust rebound over 2021-22(figure 5.C).However,this rebound was short-lived,with trade growth slowing to only 0.5 percent in 2023,well below the 6.3 percent average over 2000-19,owing to the weak external environment.Investment growth in IDA countries followed a similar pattern:it slumped to 1.4

185、 percent in 2020,the lowest in over a decade(figure 5.D).There was a strong cyclical rebound in 2021 but investment growth was subdued in 2022 and 2023,at about three percentage points a year below the 2000-19 average,reflecting the multiple crises of the past four years(World Bank 2024a).Inflation

186、and food insecurity The recovery from the pandemic was impeded by surging inflation.Headline inflation in IDA countries increased significantly from a higher base than in other EMDEs,reaching in 2022 its highest annual rate since 2008(figure 6.A).Russias invasion of Ukraine in February 2022 precipit

187、ated a significant upswing in energy prices and pushed global food prices to all-time highs.This inflationary spike eroded food affordability in many IDA countries(figure 6.B).Currency depreciations in a number of countries added to inflationary pressures.The effects of inflation are not felt equall

188、y,including within IDA countries.Inflation tends to increase poverty and inequality(Gill and Nagle 2022).Low-and middle-income households are generally more vulnerable to high inflation than wealthier households,as a result of differences in their assets,incomes,and consumption baskets.The very poor

189、est,who often have limited wage income and assets and rely,for example,on subsistence farming,will nevertheless still be affected by inflation.Russias invasion of Ukraine had pronounced impacts on IDA countries,not only through higher commodity prices but also because of their dependence on energy a

190、nd food imports from the two countries.Although elevated global commodity prices benefited some exporters of energy and metals,increases in energy and fertilizer costs largely offset the benefits of higher prices for agricultural exporters(figure 6.C).Moreover,the surge in commodity prices weighed o

191、n private consumption in IDA countries due to high food and fuel shares in their consumption baskets.As a result,the recovery stemming from a gradual waning of the pandemic and increased export earnings was muted in IDA countries,as rapidly climbing costs of living dampened domestic demand.IDA COUNT

192、RIES 29 THE GREAT REVERSAL FIGURE 6 Inflation,commodity prices,and food insecurity Inflation has slowed but still remains elevated,while food insecurity has surged alongside higher food prices and increased conflict and violence.B.Food price inflation A.Annual consumer price inflation Sources:GRFC(d

193、atabase);Haver Analytics;World Bank Macro Poverty Outlook(database).Note:EMDEs=emerging market and developing economies;IDA=IDA-eligible countries.A.Panel shows median year-on-year headline inflation.Unbalanced sample of up to 70 IDA-eligible countries and 70 EMDEs excluding IDA.B.Panel shows year-o

194、n-year group median inflation for the food component of the consumer price index for up to 31 IDA-eligible countries and 63 EMDEs excluding IDA.Last observation is February 2024.C.Data measured in U.S.dollars.Last observation is March 2024.D.Stressed:Households cannot cover some essential non-food c

195、osts without resorting to stress-coping strategies.Food Crisis:Households either experience food shortages with high acute malnutrition or meet minimal food needs through significant asset depletion or crisis-coping actions.Emergency:Households face severe food shortages,resulting in very high acute

196、 malnutrition and increased mortality,or bridge major food gaps solely through emergency livelihood strategies and asset liquidation.Worse:Households suffer from an extreme shortage of food and coping mechanisms,leading to starvation,death,destitution,and critically high acute malnutrition.Sample in

197、cludes data for up to 50 IDA-eligible countries.D.Food insecurity in IDA countries C.Commodity prices These developments led to increased hunger:651 million people in IDA countries faced food insecurity in 2023,almost double the number in 2019(figure 6.D).Fiscal balances and public debt Public debt

198、had already built up significantly in IDA countries prior to the pandemic,and increased budget deficits since 2020 have exacerbated debt burdens(figure 7.A;Kose,Ohnsorge,and Sugawara 2023).A sizable share of government debt accumulation by IDA countries over 2010-23 occurred before 0369121518Feb-20M

199、ay-20Aug-20Dec-20Mar-21Jul-21Oct-21Feb-22May-22Sep-22Dec-22Apr-23Jul-23Nov-23Feb-24IDAEMDEs excl.IDAPercent20406080100120140Jan-21Apr-21Aug-21Dec-21Apr-22Aug-22Nov-22Mar-23Jul-23Nov-23Mar-24EnergyMetals and mineralsAgricultureCommodity price indexIndex,100=February 20220050060070020192020

200、202120222023StressedFood crisisEmergency&worseNumber of people,millions048003200520072009200023IDAEMDEs excl.IDAPercent30 IDA COUNTRIES THE GREAT REVERSAL FIGURE 7 Fiscal accounts Budget deficits grew less in IDA countries than in other EMDEs in 2020 but have remaine

201、d elevated.By 2023,government debt-to-GDP ratios in IDA countries had surged by 6.7 percentage points compared to 2019about three times the increase in other EMDEs.Sovereign spreads have widened significantly for IDA countries since 2022,and bond issuances have dipped.Net interest payments as a shar

202、e of revenues have increased in IDA countries more rapidly than in other EMDEs;about half of IDA countries are in or at high risk of debt distress.B.Government debt A.Government budget deficits Sources:Dealogic;IMF-WEO(database);J.P.Morgan;Moodys Analytics;World Bank.Note:EMDEs=emerging market and d

203、eveloping economies;FCS=IDA fragile and conflict-affected situations;IDA=IDA-eligible countries;LICs=IDA low-income countries.A.Median general government net lending/borrowing for unbalanced sample of up to 74 IDA-eligible countries and 79 EMDEs excluding IDA.B.Median general government gross debt f

204、or a sample of 67 IDA-eligible countries,20 IDA LICS,27 IDA FCS,48 IDA commodity exporters,and 76 EMDEs excluding IDA.C.Median of JP Morgans Emerging Market Bond Index spreads(annual average)for an unbalanced panel of up to 13 IDA-eligible countries and 48 EMDEs excluding IDA.Last observation is Mar

205、ch 31,2024.D.Panel shows rolling 12-month totals for bond issuance by IDA governments,categorized by Moodys long-term foreign currency sovereign credit ratings.Last observation is February 2024.E.Net interest payments are the difference between primary balances and overall fiscal balances.Aggregates

206、 computed with government revenues in U.S.dollars as weights.Bars show simple average for up to 69 IDA-eligible countries and 71 EMDEs excluding IDA.Whiskers indicate interquartile range.F.Share of IDA countries eligible to access the IMFs concessional lending facilities by level of external debt di

207、stress,based on IMF-World Bank Debt Sustainability(DSA)list as of November 2023.Unbalanced panel of up to 67 IDA-eligible countries.Eritrea is excluded due to lack of latest DSA.St.Lucia is excluded since it currently uses the IMFs Sovereign Risk and Debt Sustainability Framework for Market Access C

208、ountries.D.Government bond issuance by non-investment-grade IDA countries C.Sovereign spreads F.Risk of external debt distress in IDA countries E.Net interest payments 020406080IDALICsFCSCommodityexportersCommodityimportersEMDEsexcl.IDA202320192024Percent of GDP051015Jan-19Jun-19Dec-19Jun-20Nov-20Ma

209、y-21Nov-21Apr-22Oct-22Apr-23Sep-23Mar-24IDAEMDEs excl.IDAPercentage points04800212024Ba-BCaa-CUS$,billions024681012142010-19 average2023IDAEMDEs excl.IDAPercent of government revenues020406080200020202120222023In debt distressHigh riskModerate r

210、iskLow riskPercent of countries024682002220232024202520022202320242025IDAEMDEs excl.IDA2010-18 averagePercent of GDPIDA COUNTRIES 31 THE GREAT REVERSAL the pandemic,fueled by persistent budget deficits.The fiscal support packages implemented during the pandemic,though smaller t

211、han in other EMDEs owing to IDA countries pre-existing fiscal constraints,nevertheless led to a sharp increase in deficits,to 4.5 percent of GDP on average in 2020(a rise of about two percentage points from 2019),and persisting at 4.2 percent of GDP as of 2023.There has been much less fiscal adjustm

212、ent since 2020 in IDA countries than in other EMDEs,where fiscal balances edged closer to pre-pandemic averages in 2022-23.Widening fiscal deficits have led to a sharp increase in public debt,relative to GDP,in IDA countries.By 2023,the median government debt-to-GDP ratios in IDA countries had risen

213、 by 6.7 percentage points since 2019about three times the increase in other EMDEsto more than 50 percent of GDP(figure 7.B).Particularly striking is the escalation of public debt in LICs,up by about 12 percentage points of GDP between 2019 and 2023.The recent rise in debt-to-GDP ratios has been wide

214、spread across IDA countries,occurring in nearly 70 percent of them between 2019 and 2023.The rise in government budget deficits in response to the pandemic reversed fiscal consolidation plans across IDA countries:initial forecasts back in 2018 had in fact projected a decrease in government debt from

215、 50 percent of GDP to 42.3 percent in 2023 in the median IDA country.Elevated costs of borrowing have magnified debt challenges.The synchronized increases of policy interest rates in many advanced economies in response to high inflation led to much tighter global financing conditionswith significant

216、 increases in borrowing costs for IDA countries.The median sovereign bond spread(the difference between the yield on U.S.Treasury securities and what a country pays on an equivalent issuance)for IDA countries rose from 4.7 percentage points in 2019 to a peak of 12.4 percentage points in May 2023,bef

217、ore falling back to 7.8 percentage points in March 2024.This contrasts with the relative stability of sovereign spreads for other EMDEs in this period(figure 7.C).IDA countries with weak credit ratings have been particularly marginalized in global capital markets.13 Prohibitively high financing cost

218、s have shut out many IDA countries from international capital markets and led to minimal bond issuance over the past two years,the longest issuance drought since the global recession in 2009(figure 7.D;Kenworthy,Kose,and Perevalov 2024).13 Among IDA countries,15 have weak credit ratings for sovereig

219、n bonds:Cameroon,Democratic Republic of Congo,Republic of Congo,Ethiopia,Ghana,Lao Peoples Democratic Republic,Maldives,Mali,Mozambique,Niger,Nigeria,Pakistan,Solomon Islands,Sri Lanka,and Zambia.32 IDA COUNTRIES THE GREAT REVERSAL Fiscal strains in IDA countries are also evident in the rising propo

220、rtion of government revenues allocated to interest payments.The combination of weak growth,high government debt,and elevated interest rates has led to a sharp increase in net interest payments relative to government revenues in IDA countries,to 7.3 percent in 2023.This represents a surge of 3.3 perc

221、entage points from pre-pandemic averagesa much sharper increase than the 1.7 percentage points observed in other EMDEs(figure 7.E).Increased interest payments are diverting crucial resources from essential government outlays on education,health,and infrastructure,which already lag spending in other

222、EMDEs,thus further limiting long-term growth prospects.In some heavily indebted IDA countries,interest payments now surpass historical average spending on healthcare,underscoring the severity of financing problems and their detrimental effects on public services and development initiatives.The share

223、 of IDA countries in,or at risk of,debt distress has increased sharply in recent years.More than half of IDA countries assessed in debt sustainability analysis(DSA)conducted by the World Bank and the IMF34 out of 67are either in acute debt distress or at high risk thereof(figure 7.F).This share was

224、less than one-quarter in 2013.It rose significantly in the years before the pandemic and in 2021.External balances Besides fiscal pressures,external imbalances constitute significant challenges for IDA countries.The median IDA country had a current account deficit of 4.8 percent of GDP in 2023,marke

225、dly higher than the 1.6 percent of GDP deficit recorded in other EMDEs(figure 8.A).In IDAs LICs,current account deficits are substantial,at 6.0 percent of GDP.After widening during 2020-22,primarily owing to soaring import bills driven by higher commodity prices,deficits are not anticipated to narro

226、w significantly over the projected horizon.In IDAs FCS,current account deficits are expected to widen sharply,reaching 4.6 percent of GDP by 2025.Borrowing conditions have worsened as financing needs have increased,to the detriment of fiscal positions.Median gross public financing needs,calculated a

227、s the sum of fiscal deficits and short-term government debt stocks,rose by 2.3 percentage points between 2019 and 2023,to 7.9 percent of GDP(figure 8.B).Several IDA countriesincluding Burundi,Fiji,The Gambia,Ghana,Kenya,Malawi,Mozambique,Pakistan,Togo,and Zambianow face financing needs surpassing 10

228、 percent of GDP,underscoring the fiscal pressures these countries face.IDA COUNTRIES 33 THE GREAT REVERSAL Foreign capital inflows have historically played a crucial role in financing in IDA countries,but they dipped in 2022.Net portfolio investment inflows to IDA countries averaged 0.4 percent of G

229、DP between 2019 and 2021,but there was a net outflow of 1.1 percent of GDP in 2022.Foreign direct investment(FDI)flows also declined,from 2.0 percent of GDP in 2019 to 1.7 percent in 2022,continuing a trend since the 2009 global recession.14 Excluding remittances,net FIGURE 8 External accounts Curre

230、nt account deficits and gross public financing needs have risen since 2020 in IDA countries.The sharp rise in current account deficits partly reflects the surge in fuel and food import bills.Financing needs remain elevated alongside tight financing conditions and large fiscal deficits.Foreign capita

231、l flows,historically a vital source of financing for IDA countries,fell sharply in 2022.Foreign exchange cover tends to be lower in IDA countries than in other EMDEs.B.Gross public financing needs in IDA countries A.Current account deficits Sources:IMF-WEO(database);OECD(database);UNCTAD,UNWTO;WDI(d

232、atabase);World Bank;World Bank-KNOMAD.Note:EMDEs=emerging market and developing economies;FCS=IDA fragile and conflict-affected situations;FDI=foreign direct investment;IDA=IDA-eligible countries;LICs=IDA low-income countries;SS=IDA small states.A.Sample includes 74 IDA,25 IDA LICs,32 IDA FCS,24 IDA

233、 SS,and 78 EMDEs excluding IDA.B.Sample includes 31 IDA countries.C.Aid flows refers to total net official development assistance funding.D.Median total reserves in months of imports for an unbalanced sample of 55 IDA countries and 49 EMDEs excluding IDA.Horizontal line shows three months of imports

234、,often used as a proxy for minimum international reserves adequacy.14 The decline in FDI is a cause for concern.However,equally troubling is the nature and sectoral distribution of FDI in several IDA countries.In some IDA countries,FDI has primarily targeted extractive sectors,resulting in limited b

235、ackward linkages.This diminishes the direct impact of FDI on job creation and wages,while also constraining its potential spillover effects on domestic enterprises(Saurav,Lia,and Singh 2020;IMF 2023a).C.Net financial flows in IDA countries 0481220192023RangeMedianAveragePercent of GDP-20246810121420

236、02200420062008200022FDIRemittancesPortfolio investmentsAid flowsTotalPercent of GDP02468200212022IDAEMDEs excl.IDAMonths of imports02468IDALICsFCSSSEMDEsexcl.IDA20202022420252010-19Percent of GDPD.Foreign exchange reserves 34 IDA COUNTRIES THE GREAT REVERS

237、AL capital inflows to IDA countries(relative to GDP)have been volatile over the past decade.Although remittances have risen(and stayed steady)in recent years,other capital flows have been volatile around a gradually declining trend,almost halving from their 2010-13 average.In 2022,total capital flow

238、s were the lowest since 2008,no doubt partly owing to the recent tightening of financial conditions(figure 8.C).IDA countries also tend to have lower levels of reserves than other EMDEs(figure 8.D).IV.Near-term growth prospects:2024-25 Growth in IDA countries is expected to pick up in 2024-25 as dom

239、estic demand recovers,but their recovery is projected to be weak relative to their pre-pandemic performance.Output growth GDP growth in IDA countries is forecast to strengthen in 2024-25 but to remain weaker than its average pace in the decade before the pandemic.Growth is projected to accelerate fr

240、om an estimated rate of 3.7 percent in 2023 to 4.3 percent this year and 4.5 percent in 2025outpacing other EMDEs in both years but remaining weaker than the 2010-19 average in IDA countries(figure 9.A).This pickup is unlikely to be sufficient to make significant progress on poverty reduction.15 The

241、 projected pick-up in growth in 2024-25 is driven largely by domestic and cyclical factors,with demand assumed to strengthen as inflationary pressures recede,interest rates decline,and financial conditions become more accommodative(figure 9.B).The contribution from net exports to growth is expected

242、to moderate as firming export growth is offset by a rebound in imports after last years contraction.These forecasts assume that security challenges in several IDA countries moderate;that conflicts elsewhere do not escalate;that the magnitude of any natural disasters is not unusual;and that no new de

243、bt crises emerge.The outlook continues to diverge across IDA countries(figure 9.C).After pronounced weakness in 2023,growth in IDAs LICs is expected to pick up to an average pace of 5.1 percent a year in 2024-25,0.5 percentage point lower than January forecasts.Growth in IDAs FCS is also forecast to

244、 increase,but only to an average pace of 3.7 percent a year in 2024-25well below overall 15 Other recent World Bank publications present a detailed discussion on the outlook for Sub-Saharan Africa and South Asia,both large IDA regions.They report rising GDP growth over the near term but also note th

245、at growth rates will remain lower than pre-pandemic averages,highlighting the weak pass-through from growth to poverty reduction in Africa and modest job creation trends in South Asia(World Bank 2024b,2024c).38 IDA COUNTRIES THE GREAT REVERSAL FIGURE 9 Near-term prospects Output growth is expected t

246、o pick up in IDA countries in 2024-25,driven by strengthening domestic demand.Although inflation is expected to recede in the IDA aggregate over the next two years,it remains elevated in many countries,with inflation re-accelerating in some cases in early 2024.B.Contributions to GDP growth in IDA co

247、untries A.GDP growth Sources:Haver Analytics;World Bank;World Bank Macro Poverty Outlook(database).Note:e=estimate;f=forecast.EMDEs=emerging market and developing economies;FCS=IDA fragile and conflict-affected situations;IDA=IDA-eligible countries;LICs=IDA low-income countries;SS=IDA small states e

248、xcluding Guyana.GDP aggregates calculated using real U.S.dollar GDP weights at average 2010-19 prices and market exchange rates.B.37 IDA countries report GDP component data,which is different from the number of countries reporting GDP level data.As such,GDP growth number derived from components diff

249、ers from numbers presented in table A.1.C.Bars show interquartile range,based on different IDA subgroups.D.Trade is calculated as an average of exports and imports.World trade projections based on the January 2024 Global Economic Prospects report.IDA trade projections based on current World Bank pro

250、jections.E.Panel shows median year-on-year headline inflation.Unbalanced sample of up to 28 IDA-eligible countries and 54 EMDEs excluding IDA.Dotted line shows forecasts for 2024 and 2025 from World Bank Macro Poverty Outlook database.F.Inflation measured monthly on a year-on-year basis.Sample inclu

251、des 38 IDA countries.Latest refers to January 2024.D.Trade growth C.Growth across IDA countries:2024 F.Share of IDA countries with increasing monthly inflation E.Headline consumer price inflation from 12 months earlier -5051020222023e2024f2025fGovernment consumptionPrivate consumptionExportsFixed in

252、vesmentImportsPercentage points0123456IDALICsFCSSSEMDEsexcl.IDAInterquartile rangeMedian growthGDP-weighted growthPercent0246810IDAWorld2022202320242000-19 averagePercent0123456IDALICsFCSSSEMDEsexcl.IDA2023e2024f2025fPercent0255075Jan-23Feb-23Mar-23Apr-23May-23Jun-23Jul-23Aug-23Sep-23Oct-23Nov-23Dec

253、-23LatestPercent of IDA countries024681012Feb-20May-20Aug-20Nov-20Feb-21May-21Aug-21Nov-21Feb-22May-22Aug-22Nov-22Feb-23May-23Aug-23Nov-232025fIDAEMDEs excl.IDAPercentIDA COUNTRIES 39 THE GREAT REVERSAL growth in IDA countries and a 0.4 percentage point downgrade from January.Growth in IDAs small st

254、ates,after picking up sharply in 2021-22 and moderating last year,is projected to slow further,from 4.5 percent in 2023 to 4.1 percent a year in 2024-25,broadly in line with the January forecast,as global tourism and travel stabilize at the pre-pandemic levels reached this year(UNWTO 2024).Downgrade

255、s to growth forecasts since January are concentrated in IDAs poorer and more fragile economies.There have been downward revisions to 2024 growth in about 75 percent of IDAs LICs and 60 percent of IDAs FCS,in several cases reflecting delays in expected improvements to security and stability after rec

256、ent increases in conflict and violence.16 The current El Nio weather pattern could bring further damage to agricultural output,particularly in East Asia and the Pacific,Latin America and the Caribbean,and Sub-Saharan Africa(FAO 2023;World Bank 2024a).Trade growth Improvements in global trade growth

257、are anticipated to support activity in IDA countries in the near term(figure 9.D).Global trade has shown tentative signs of firming in recent months alongside the growth of industrial production(Kose and Mulabdic 2024).The contraction in global goods trade appears to have bottomed out,with volumes r

258、ising at the start of 2024.These developments are expected to support a modest pickup in trade growth as the services recovery tops out.Export growth in IDA countries is expected to edge up as the recovery in global demand for goods gathers pace.Also,in some IDA countries,the pick-up in export growt

259、h reflects a recovery in the supply of key commodities as local conditions improve,production bottlenecks ease,and fertilizer prices fall.In some of IDAs FCS,a projected resumption of trade with neighboring countries is a significant factor.Inflation Inflation is expected to continue declining in ID

260、A countries but to remain above its pre-pandemic average.Median headline inflation in these countries,on a 12-month basis,has fallen from its July 2022 peak of almost 11 percent to about 5 percent in recent months(figure 9.E).Nevertheless,of the 38 IDA countries that report monthly consumer price in

261、dexes,18 continued to experience rising 16 In the forecast for 2024-25,notable performers include Guyana,Rwanda,and Senegal.Conversely,Haiti,Myanmar,and Sudan are anticipated to fare particularly poorly due to ongoing conflicts and violence.40 IDA COUNTRIES THE GREAT REVERSAL inflation in early 2024

262、(figure 9.F).About one-fifth of these 38 countries have double-digit inflation,in many cases owing to currency depreciation and elevated food prices.Despite the projected decline,inflation in IDA countries overall is anticipated to remain about 1.5 percentage points above its 2015-19 average over th

263、e next two years and about one percentage point above projected inflation in other EMDEs.Cumulative price rises will continue to be felt by many households in IDA countries,making it more difficult for them to recover the real income losses of recent years.V.Output losses,growth,convergence,and pove

264、rty Output losses in IDA countries from the pandemic-driven global recession of 2020 and subsequent crises remain large.Over 2020-24,IDA countries are set to experience the weakest half-decade of growth since the early 1990s.These developments have dealt a serious blow to their progress on income co

265、nvergence with advanced economies and poverty reduction.Over 2020-24,per capita incomes in half of IDA countries have been growing more slowly than those of advanced economiesthe largest such share since the start of this century.Weak growth prospects will make progress on poverty reduction more dif

266、ficult.All told,this constitutes a historic reversal.Output losses Output losses relative to pre-pandemic trends have been substantial in IDA countries.Output in IDA countries fell 4 percent below pre-pandemic trends in 2020;this gap widened to 5.3 percent by 2023 and is projected to reach 5.7 perce

267、nt in 2024 and 5.9 percent in 2025.Among IDA country groups,the steepest initial output losses,by far,occurred in small states in 2020,and these have been only partly recovered,with gaps relative to the pre-pandemic trend set to remain in double digits in percentage terms in 2024-25.In IDAs LICs,out

268、put losses were initially smaller,but they have risen(figure 10.A).Cumulative output losses in IDA countries since the onset of the pandemic have been substantial,especially for IDAs small states(figure 10.B).IDAs FCS have also seen larger cumulative output losses than IDA countries overall,while lo

269、sses have been more muted in LICs.Growth The recovery in IDA countries is projected to remain weaker than in previous post-recession rebounds,including the recovery from the 2009 global recession,and also weaker than in other EMDEs.The weakness of the recovery from the 2020 global recession relative

270、 to earlier recoveries is largely attributable to the compounding effects of the unusual overlapping crises of recent years alongside longer-term scarring from the pandemic(figure 10.C).In turn,output in IDA countries is set to continue following a lower path than before 2020.These 44 IDA COUNTRIES

271、THE GREAT REVERSAL FIGURE 10 Output losses and growth Output declined sharply from pre-pandemic trends.Output losses remain large,particularly for IDAs small states.The recovery in IDA countries has been more muted than the equivalent after the 2009 global recession.Overall,IDA countries are set to

272、experience the weakest half-decade of growth since the early 1990s.B.Cumulative output losses,2020-25 A.Deviation of output from pre-pandemic trends Source:World Bank.Note:e=estimate;f=forecast.EMDEs=emerging market and developing economies;FCS=IDA fragile and conflict-affected situations;IDA=IDA-el

273、igible countries;LICs=IDA low-income countries;SS=IDA small states.GDP aggregates calculated using real U.S.dollar GDP weights at average 2010-19 prices and market exchange rates.A.Panel shows percent deviation between latest projections and forecasts from the January 2020 Global Economic Prospects

274、report.For 2023 and beyond,the January 2020 baseline is extended using projected growth for 2022.B.Panel shows output losses for IDA subgroups over 2020-25 relative to pre-pandemic trend as a percentage of 2019 GDP.Pre-pandemic trend based on January 2020 baseline extended using 2022 projections.C.I

275、ndexes show the evolution of output in IDA-eligible countries around the global recessions of 2009 and 2020.“t”represents the year of the global recession.D.GDP growth in IDA countries,annual average C.Expansions after 2009 and 2020 in IDA countries countries entered the pandemic-induced global rece

276、ssion in 2020 less well-prepared and with larger vulnerabilities than when they entered the global recession in 2009(World Bank 2020a).Many IDA countries were particularly exposed to the impact of the pandemic because of weak healthcare systems,heavy reliance on tourism,higher debt vulnerabilities,e

277、xposure to financial disruptions,and/or high dependence on energy and other commodity exports.Overall,in 2020-24,IDA countries are projected to experience the weakest half-decade of growth since the early 1990s(figure 10.D).The recovery from the global recession of 2020 is also expected to remain we

278、ak in per capita income terms.GDP per capita in IDA countries is projected to-80-60-40-200IDALICsFCSSSEMDEsexcl.IDAPercent of 2019 GDP955145t-1tt+1t+2t+3t+4t+520092020Index,100=t-102---192020-24fPercent-18-15-12-9-6-30200222023e2024f2025fI

279、DALICsFCSSSEMDEs excl.IDAPercentIDA COUNTRIES 45 THE GREAT REVERSAL grow by an annual average of 1.2 percent over 2020-24,less than half its 2010-19 average annual growth rate of 2.5 percent(table 2).Some of the most vulnerable IDA countries are expected to fall further behind,with per capita income

280、 for 2025 projected to remain below its 2019 level in nearly one third of IDA countries,including 42 percent of LICs and half of FCS(figure 11.A).Convergence Catch-up with advanced-economy per capita income is projected to stall in IDA countries over the period from 2020-24.Per capita income growth

281、in IDA countries over 2020-24(averaging 1.2 percent a year)is expected to be almost identical to the rate in advanced economies,stalling the catch-up process in these countries.Indeed,over 2021-24,the period after the 2020 global recession,IDA countries are projected to see lower average per capita

282、income growth than advanced economies,with earlier gains for IDAs FCS slipping back notably(figure 11.B).The reversal is also broad-based:over 2020-24,average per capita income growth is expected to trail that of advanced economies in half of IDA countries(figure 11.C).In IDA countries,this comes on

283、 the heels of slowing progress over the last two decades in closing these gaps(figure 11.D).In contrast,other EMDEs are TABLE 2 GDP growth per capita 2010-19 average 2020 2021 2022 2023e IDA 2.5-1.8 2.4 2.0 1.5 IDA only 3.2-1.4 2.3 2.5 2.1 IDA blend 1.8-2.4 2.6 1.3 0.6 IDA LICs 1.7-1.4 1.3 2.2 1.0 I

284、DA MICs 2.9-1.9 2.8 1.9 1.5 IDA FCS 1.5-4.0-0.1 1.4 0.4 IDA SS 1.9-13.9 4.5 6.5 3.0 2024f 2025f 2.1 2.3 2.9 3.1 1.1 1.4 2.1 2.5 2.0 2.4 1.1 1.3 2.5 2.6 Other aggregates Advanced economies*1.5-4.3 5.4 2.4 1.3 1.2 1.4 EMDEs*3.8-2.5 6.1 2.8 3.2 2.8 3.1 EMDEs excl.IDA 4.1-2.3 6.7 3.2 3.7 3.2 3.5 Source:

285、World Bank.Note:e=estimate;f=forecast.FCS=fragile and conflict-affected situations;LICs=low-income countries;MICs=middle-income countries(includes lower-middle income and upper-middle income countries);SS=small states.World Bank forecasts are frequently updated based on new information.Consequently,

286、projections presented here may differ from those contained in other World Bank documents,even if basic assessments of countries prospects do not differ at any given date.Aggregate growth rates exclude Afghanistan,Lebanon,Somalia,the Syrian Arab Republic,and the Republic of Yemen because of a high de

287、gree of uncertainty.Aggregate growth rates for IDA small states exclude Guyana.IDA sample includes 71 economies.*The numbers presented for advanced economies and EMDEs reflect preliminary working assumptions and are subject to change.The World Bank Group publishes official forecasts for advanced eco

288、nomies and EMDEs only in January and June.46 IDA COUNTRIES THE GREAT REVERSAL FIGURE 11 Per capita income growth Per capita income growth has been weak in absolute terms for IDA countries as well as in relation to advanced economies and other EMDEs.As a result,the catch-up process with advanced econ

289、omy per capita incomes has stalled in many IDA countries.B.Annual change in GDP per capita growth in IDA countries relative to advanced economies A.Share of IDA countries with lower GDP per capita in 2024 than in 2019 Source:World Bank.Note:EMDEs=emerging market and developing economies;FCS=IDA frag

290、ile and conflict-affected situations;IDA=IDA-eligible countries;LICs=IDA low-income countries;SS=IDA small states.GDP aggregates calculated using real U.S.dollar GDP weights at average 2010-19 prices and market exchange rates.Sample includes 71 IDA countries.F.Per capita income in IDA subgroups as p

291、ercent of advanced-economy per capita income.D.Change in GDP per capita growth in IDA countries relative to advanced economies C.Share of IDA countries with GDP per capita growth lower than in advanced economies -3-2-10123IDALICsFCSSSEMDEsexcl.IDA2021-24 average2010-19 averagePercentage points025507

292、51---192020-24Percent of IDA countries-20---192020-24Percentage points0204060IDALICsFCSSSEMDEsexcl.IDAPercent of countriesF.Per capita income levels in IDA countries relative to advanced economies E.Cumulative change in pe

293、r capita income growth relative to advanced economies 0481216IDALICsFCSSSEMDEsexcl.IDAPercent202320092000-15-10-5050202120222023e 2024f2025fIDALICsFCSSSEMDEs excl.IDAIndex,100=2019IDA COUNTRIES 47 THE GREAT REVERSAL expected to continue to catch-up with advanced economies,albeit at a slow

294、er pace than the 2010-19 average,with per capita income growth projected to be higher in other EMDEs than in IDA countries,as it has been every year from 2021(figures 11.E and 11.F).Poverty IDA countries growth will remain insufficient to tackle key development challenges,with the pace of reduction

295、in extreme poverty slowing and lagging established goals.Global extreme poverty rates declined over the three decades prior to the pandemic,driven in large part by strong catch-up in China and India as they recorded sustained high per capita income growth rates.However,the decline in poverty has slo

296、wed,including in IDA countries.Although the global rate of extreme poverty is expected to continue falling,the decline is projected to slower than in the decades before the pandemic.Consequently,the goal of reducing global poverty from its current rate of about nine percent to three percent of the w

297、orlds population by 2030 appears out of reach(World Bank 2022b).Moreover,extreme poverty is becoming increasingly concentrated,particularly in Sub-Saharan Africa and in FCS.17 17 In Sub-Saharan Africa,which accounts for 52 percent of IDA countries,the share of the worlds poor has grown,from 14 perce

298、nt in 1990 to 62 percent in 2023.FIGURE 12 Extreme poverty Progress in reducing extreme poverty was halted by the pandemic.Going forward,reductions in extreme poverty will be constrained by weak per capita income growth in many IDA countries.B.Extreme poverty in absolute terms:1990-2030 A.Extreme po

299、verty in percent of population:1990-2030 Sources:Mahler and Lakner(2022);World Bank Poverty and Inequality Platform;World Bank.Note:e=estimate;f=forecast.CHN=China;EMDEs=emerging market and developing economies;FCS=IDA fragile and conflict-affected situations;IDA=IDA-eligible countries;IND=India;LIC

300、s=IDA low-income countries;SS=IDA small states.GDP aggregates calculated using real U.S.dollar GDP weights at average 2010-19 prices and market exchange rates.A.Sample includes up to 75 IDA countries,and 83 EMDEs excluding IDA.World includes 158 countries.B.Sample includes up to 75 IDA countries.Res

301、t of the world includes 81 countries.05001,0001,5002,0002,50002005200252030IDAChinaIndiaRest of the worldNumber of people,millions0002005200252030IDAEMDEs excl.IDAEMDEs excl.IDA,CHN,INDWorld excl.IDAPercent of population48 IDA COUNTRIES THE GREA

302、T REVERSAL 18 Extreme poverty rates between 2019 and 2023 increased in LICs from 42.1 to 42.6 percent;in FCS,from 34.2 to 35.2 percent;and in small states,from 16.0 percent to 17.7 percent.The pandemic reversed about three years of progress in extreme poverty reduction in IDA countries.Extreme pover

303、tythe number living in extreme poverty in proportion to the global populationrose by 0.8 percentage point in 2020,unraveling about three years of previous progress.Weaker per capita income growth prospects will make progress harder in the forecast period.Projected near-term growth is insufficient to

304、 unlock major progress in reducing poverty(World Bank 2024c).Even if growth exceeds expectations,its pass-through to household consumption expenditures in many IDA countries,particularly in Sub-Saharan Africa,is likely to be relatively muted,stifling the potential boost to household welfare and pove

305、rty reduction(Wu et al.2024).By 2030,an estimated 21.2 percent of the population in IDA countries will still be living in extreme poverty(figure 12.A).Although the average extreme poverty rate in IDA countries is estimated to have returned to its 2019 level in 2022,and although it appears to have re

306、sumed a modest downward trend,for key country groups within IDA,including LICs,FCS,and small states,the poverty rate remained higher in 2023 than in 2019.18 The absolute number of people living in extreme poverty in IDA countries is now higher than in 1990,and progress reducing this number over the

307、remainder of the decade is expected to be modest.Globally,extreme poverty has declined sharply,from about 2.0 billion in 1990 to 691 million people in 2023(figure 12.B).China and India account for 1.1 billion of this reduction.In IDA countries,however,the number of people living in extreme poverty h

308、as remained stubbornly high.In 1990,an estimated 473 million people in IDA countries lived in extreme poverty;by 2023,this had risen to 498 million.This figure is projected to fall moderately by 2030,to 463 million.In the Middle East and North Africa region,extreme poverty is expected to increase be

309、tween 2023 and 2030.VI.Risks to the outlook The economic distress of IDA countries would persist or worsen if the current weakness becomes more protracted or deteriorates further.Climate change could take a greater toll than currently expected,with changing weather patterns contributing to more freq

310、uent and severe natural disasters,which would trigger large output losses and increase poverty.A further rise in conflict,local political instability,and violence could impede recoveries and exacerbate food insecurity in IDA countries.A range of external factors could adversely affect IDA countries

311、and compound risks to growth.IDA countries are at risk of a lost decade of development.The overlapping crises of recent years have caused progress toward key development objectives in IDA countries shudder to a halt,or even reverse.A more prolonged reversal in income convergence with both advanced e

312、conomies and with other EMDEs would have profound implications.With heightened vulnerabilities and limited buffers to respond,IDA countries are particularly exposed should key risksmany beyond their controlmaterialize.This could lead to further instability,increased fiscal pressures,and underinvestm

313、ent,in turn undermining longer-term growth and development prospects.If these risks materialize,IDA countries could experience a lost decade in development.Climate change-related disasters loom large as a risk for IDA countries.Many IDA countries,particularly those located in tropical and subtropica

314、l areas,are exposed to climate change-related risks.19 The negative effects of climate change and associated natural disasters on growth could be amplified by limited fiscal capacity to respond to them,or through their impact on public sector balance sheets(Milivojevic 2023).The effects of natural d

315、isasters are likely to be uneven across populations,generally increasing poverty.Under an adverse scenario(combining a pessimistic baseline with high climate change impacts),over 130 19 IDA countries located in tropical and subtropical regions are prone to natural disasters such as hurricanes,typhoo

316、ns,heavy monsoons,and droughts.In the Sahel region,countries like Niger,Chad,Sudan,and Mali endure arid climates,making them susceptible to desertification with its adverse effects on agriculture and living conditions.Bangladesh and Pakistan encounter seasonal river basin flooding,which,despite enri

317、ching soils,frequently results in extensive damage and displacement.Additionally,countries such as Mozambique and Bangladesh are at high risk from cyclones and rising sea levels.52 IDA COUNTRIES THE GREAT REVERSAL 20 Pervasive violence and political instability exacerbate the challenging economic an

318、d humanitarian situations in many IDA countries last yearespecially in the Sahel regionincluding Burkina Faso,Mali,Niger,Somalia,South Sudan,and Sudan,as well as in Ethiopia and the Democratic Republic of Congo.million people could be pushed into extreme poverty by 2030,many of them in IDA countries

319、(Hallegatte and Rozenberg 2017;Jafino et al.2020).Worsening conflict and violence could undermine growth and impede development progress.Conflict has surged in IDA countries recently,notably in the Sahel region(figure 13.A).20 Further escalation could intensify political instability,deepen food inse

320、curity,divert scarce government resources away from growth-enhancing areas such as health and education,and undermine investment prospects.The result would be weaker growth and development outcomes.IDA countries are also exposed to an array of external risks.Many of these are not unique to IDA count

321、ries but would nevertheless have negative spillovers for these economies(World Bank 2024a).In particular:Falling long-term global growth prospects.Risks to the outlook for IDA countries are compounded by the threat of weaker-than-expected long-term global growth.A longer-term perspective suggests th

322、at a more fundamental structural slowdown is likely to persist globally throughout the remainder of the decade.Global potential growth is projected to fall to a three-decade low of 2.2 percent over the remainder of the 2020s0.4 percentage point below the average from 2011-21 and continuing a secular

323、 deceleration(figure 13.B;World Bank 2023a).The slowdown has multiple causes:the global labor force is aging and growing more slowly,and the growth rates of investment and total factor productivity are weakening.A risk is that the decelerating trend could become more pronounced if,for example,labor

324、market,education,or health outcomes fail to meet expectations;if investment falls short of projections;or if new recessions,climate disasters,or other shocks result in enduring damage.Geopolitical risks increased sharply in the wake of the recent conflict in the Middle East,in addition to Russias in

325、vasion of Ukraine(figure 13.C).Further escalationsespecially if major oil producers become more embroiledcould lead to significant oil supply disruptions and spikes in food and fuel prices(Ha et al.2023),with diverse but significant impacts on IDA countries.Geopolitical tensions could also prompt a

326、flight to safety in international capital markets,resulting in currency depreciations for countries perceived as riskier,including many IDA countries,pushing up IDA COUNTRIES 53 THE GREAT REVERSAL FIGURE 13 Risks IDA countries are exposed to a range of risks,including around conflict and violence as

327、 well as trade and commodity market developments.The slowdown in potential global growth over the remainder of the decade will also pose headwinds to growth prospects in IDA countries,especially when combined with geopolitical risks,and the expected growth deceleration in Chinaa key economic partner

328、 for many IDA countries.The historically elevated real cost of external finance is also a threat to the recovery.B.Potential growth A.Violent events in low-income countries Sources:ACLED(database);BP Statistical Review;Caldara and Iacoviello(2022);Federal Reserve Bank of St.Louis;International Debt

329、Statistics(database);Kose and Ohnsorge(2023);Refinitiv US,LLC;World Bank.Note:AEs=advanced economies;CHN=China;EMDEs=emerging market and developing economies;IDA=IDA-eligible countries;LICs=low-income countries.B.Panel shows GDP-weighted averages of production function-based potential growth estimat

330、es for 29 advanced economies and 53 EMDEs,as in Kose and Ohnsorge(2023).Data for 2022-30 are forecasts.C.Geopolitical risk index reflects an automated text-search of electronic articles from 10 newspapers on adverse geopolitical events.Last observation is February 26,2024.Red vertical lines show adv

331、erse geopolitical events.The index is normalized to 100 throughout the 19852019 period.D.Panel shows share of goods exports destined for China.Last observation is 2021.F.“Magnitude”is trough-to-peak change and“speed”is average change per quarter during periods of rising real rates.Real rate is U.S.p

332、olicy rate minus one-year-ahead expected inflation from consumer surveys,adjusted for persistent errors.D.Exports to China C.Geopolitical risk index and conflicts 02468024----212022-30WorldAEsEMDEsTotal factor productivityCapitalLaborPotential grow

333、th(RHS)Percentage pointsPercent020040060080020002002200520082001820212024Index,100=1985-2019 9/11 attackLibyan civil warU.S.airstrike on BaghdadInvasion of UkraineLatest conflict in the Middle East02468006200720082009200001920202021IDAEMDEs excl.IDA and CHNPercent of total exports06001,2001,800Mar-18Aug-18Jan-19Jun-19Nov-19Apr-20Sep-20Feb-21Ju