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Mail & Guardian reports that although global economic growth is slowly picking up and vaccinations are being rolled out, research shows that for emerging markets employment recovery will take longer to get back to pre-pandemic levels.
And countries’ prospects depend on how fast they can inoculate their citizens. According to a research note by BNP Paribas, the 2021 economic recovery will not offset unemployment, because jobs will only improve by 4 percentage points below pre-pandemic levels. The improvement will not be enough to compensate for about 9% of jobs lost in the emerging market in 2020. “Joblessness has surged in these EMs [emerging markets] since the pandemic, and their recoveries are likely to take longer,” the research note indicated. The group estimates that a 17% hit on the wages in these markets is also posing a hurdle to economic recovery because people do not have enough money to spend. “The economic outlook for South Africa, which is also a laggard with respect to the pace of vaccinations, is perhaps the most concerning among major EMs. Beset with large structural weaknesses pre-Covid, its labour market is likely to weigh on recovery prospects,” according to the research. As lockdown measures have been loosened in SA, labour force participation has begun to normalise. But the absorption rates of jobs remain low. Jeff Schultz, a senior economist at BNP Paribas SA, said the country should not underestimate the scarring done to the consumer or the time it will take to heal the country’s labour market. He added that the International Labour Organisation’s statistics placed SA as one of the few emerging markets to experience a real fall in wages during 2020.
- Read the full original of the report in the above regard by Tshegofatso Mathe at Mail & Guardian
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