Jakarta (Indonesia Window) – The World Bank Group on Tuesday (Jan. 5) issued a guarded growth forecast for the global economy this year, saying that a four percent overall expansion was likely, although the recovery will likely be a ‘subdued’ one.

January’s Global Economic Prospects mentioned that although the economy is growing again following the 4.3 percent contraction of 2020, policy makers should move decisively as the COVID-19 pandemic has caused a heavy toll of deaths and illness, plunged millions into poverty, and may depress economic activity and incomes for a prolonged period.

Immediate policy priorities should now focus on controlling the spread of coronavirus and ensuring rapid and widespread vaccine deployment.

“To support economic recovery, authorities also need to facilitate a re-investment cycle aimed at sustainable growth that is less dependent on government debt,” the World Bank advised.

World Bank Group President David Malpass said that the global economy appeared to have entered a subdued recovery, policymakers face formidable challenges in public health, debt management, budget policies, central banking and structural reforms as they try to ensure that this still fragile global recovery gains traction and sets a foundation for robust growth.

“To overcome the impacts of the pandemic and counter the investment headwind, there needs to be a major push to improve business environments, increase labor and product market flexibility, and strengthen transparency and governance,” Malpass said.

Reporting by Indonesia Window