Key Info
- The toll the COVID-19 pandemic has exacted on the worldwide financial system has been important, with the Worldwide Financial Fund (IMF) estimating that median international GDP dropped by 3.9% from 2019 to 2020, making it the worst financial downturn because the Nice Despair. Whereas the worldwide financial system was estimated to have recovered in 2021, restoration has been uneven and disparities in vaccine entry and protection might threaten enchancment in a lot of the world.
- Amongst different priorities, the White Home’s U.S. COVID-19 World Response and Restoration Framework seeks to bolster the economies of nations which have suffered because of the pandemic. This can be particularly necessary in international locations the place the U.S. has main investments in different well being areas, comparable to PEPFAR, the U.S. international HIV program. The financial impacts of COVID-19 on the HIV response might be as consequential because the direct well being impacts, and as such, could considerably have an effect on U.S. efforts in these international locations. To tell such efforts, we examined the present and projected financial affect of COVID-19 in 53 PEPFAR international locations.
- Total, we discover that within the majority of PEPFAR international locations, GDP fell in 2020, the 12 months the pandemic emerged, in comparison with 2019. In 11 international locations, the contraction was better than 10%. Whereas PEPFAR international locations skilled much less of a median GDP drop than the worldwide financial system total in 2020 (1.9% in comparison with 3.9%), they often fared worse than their financial and regional friends.
- Whereas the worldwide financial system was estimated to have recovered in 2021, this was not the case in PEPFAR international locations. Whereas virtually all PEPFAR international locations have been estimated to have skilled some GDP development in 2021, the projected development, not less than by means of 2024, stays beneath pre-pandemic projections (10-13% beneath). Against this, the present projections of worldwide GDP exceed the pre-pandemic projections. As well as, the challenges dealing with the worldwide financial system are more likely to proceed, significantly in low and middle-income international locations, because the robust rebound in 2021 is anticipated to decelerate in 2022.
- Lastly, there’s important uncertainty dealing with financial restoration in PEPFAR international locations, which can be extremely depending on the longer term course of the COVID-19 pandemic, financial reduction efforts, and vaccine roll-out. At the moment, in 30 of the 53 PEPFAR international locations, lower than a 3rd of the inhabitants has acquired not less than one vaccine dose and solely 10 are on observe to fulfill international COVID-19 vaccine targets this 12 months.
Introduction
The toll the COVID-19 pandemic has exacted on the worldwide financial system has been important, with the Worldwide Financial Fund (IMF) estimating that international median GDP dropped by 3.9% from 2019 to 2020, making it the worst downturn because the Nice Despair. Final 12 months, in 2021, as international locations began to reopen and vaccines grew to become out there, the worldwide financial system was estimated to develop, although nonetheless beneath pre-pandemic projections, and restoration has been uneven throughout international locations and areas. As well as, the IMF has warned that vaccine entry is the financial restoration “fault line”, as some international locations look to renew regular exercise and others proceed to face new waves of infections and rising deaths. Certainly, vaccine protection in low-income international locations is nicely beneath all others and, at present charges, many are unlikely to achieve international vaccine targets.
The White Home U.S. COVID-19 World Response and Restoration Framework consists of an goal to “bolster economies and different important techniques below stress as a consequence of COVID-19 to forestall backsliding and allow restoration.” This can be particularly necessary in international locations the place the U.S. has main investments in different well being areas, comparable to PEPFAR, the U.S. international HIV/AIDS program. As a result of HIV can be an infectious illness, however one with no vaccine or treatment, the financial impacts of COVID-19 on the HIV response might be as consequential as and exacerbate the direct well being impacts.
This transient examines the present and projected financial affect of COVID-19 in PEPFAR international locations. We used information from the Worldwide Financial Fund’s (IMF) World Financial Outlook (WEO), on GDP and GDP development projections for 53 international locations that have been required by PEPFAR to submit a Nation Operational Plan or Regional Operational Plan (COP/ROP) in FY 2020. We additionally in contrast the IMF’s WEO pre-pandemic and present information projections to raised perceive the estimated financial affect. Pre-pandemic projections have been taken from the October 2019 WEO database, and present information projections have been taken from the October 2021 WEO database. The appendix comprises WEO 2019-2021 GDP development information, as of October 2021 for all 53 PEPFAR international locations in addition to the world median mixture.
Key Findings
Financial Impression of COVID-19 in 2020
Virtually all PEPFAR international locations skilled GDP contractions in 2020 in comparison with 2019, and plenty of fared worse than their financial and regional friends. Nonetheless, as a bunch, PEPFAR international locations skilled much less of a contraction than the worldwide financial system in 2020.
- 32 of the 53 PEPFAR international locations (60%) have been estimated to have skilled contractions in GDP in 2020. In 11 international locations, the contraction was better than 10%. Of the highest 5 international locations with the biggest estimated contractions, three have been in Sub-Saharan Africa (Angola, Zambia, and Namibia); the opposite 2 (Brazil and Panama) have been within the Western Hemisphere. The contractions ranged from -0.04% (Nicaragua) to -30.9% (Angola) (see Determine 1).
- 21 PEPFAR international locations skilled optimistic GDP development in 2020 (see Determine 1), though in 11 of those international locations, development was decrease than in 2019 (see Appendix 1).
- In comparison with the worldwide financial system, PEPFAR international locations as a bunch skilled much less of a contraction in 2020 (1.9% median drop in PEPFAR international locations in comparison with a 3.9% median drop globally) (see Determine 1), although in comparison with their financial and regional friends, PEPFAR international locations usually lagged behind non-PEPFAR international locations (see Determine 2).
Financial Impression in 2021 and Past
Whereas virtually all PEPFAR international locations have been estimated to see GDP develop in 2021, development stays beneath pre-pandemic projections, in distinction to the worldwide financial system total which is estimated to have totally recovered. As well as, there’s future uncertainty.
- Virtually all PEPFAR international locations (49 international locations or 92%) have been estimated to have skilled some financial restoration in 2021, with increased GDP development in comparison with 2020 (see Determine 3). Of the highest 5 with the biggest estimated GDP development in 2021, two have been within the Western Hemisphere (Haiti and Guyana); the opposite three have been in Sub-Saharan Africa (Lesotho, South Africa, and Angola). GDP development ranged from 0.06% (Rwanda) to 39% (Haiti) (see Determine 4). Alternatively, detrimental development, or contractions, occurred for Ethiopia, Myanmar, and South Sudan.
- Nonetheless, projected GDP of the 53 PEPFAR international locations, as a bunch, is anticipated to stay beneath pre-pandemic projections, not less than by means of 2024 (at 10-13% decrease than the pre-pandemic outlook) (see Determine 5), because it does for 34 of the 53 international locations.
- Against this, international GDP shouldn’t be solely estimated to have returned to its pre-pandemic projections in 2021, it’s projected to exceed these as of 2022 and past. This largely displays the robust and rebounding economies in high-income international locations which have better entry to vaccines and a bigger share of their populations vaccinated. And although LMICs as a bunch are nonetheless projected to see decrease GDP development than their pre-pandemic projections (2-4% decrease by means of 2024), they’re anticipated to outperform PEPFAR international locations over this era (see Determine 5). As well as, following the robust rebound in 2021, international financial development is more likely to decelerate placing additional pressures on the restoration in low and middle-income international locations.
- Future restoration in PEPFAR international locations is unsure and extremely depending on the longer term course of the COVID-19 pandemic, financial reduction efforts, and, in the end, vaccine roll-out. At the moment, in 30 of the 53 PEPFAR international locations, lower than a 3rd of the inhabitants has acquired not less than one vaccine dose and solely 10 PEPFAR international locations (18%) are on track to achieve the WHO purpose of 70% vaccine protection by mid-2022 (see Determine 6).
Trying Forward
It’s clear that COVID-19 has set again financial progress worldwide and in PEPFAR international locations. Whereas PEPFAR international locations, most of that are LMICs, didn’t seem like as arduous hit economically within the first 12 months of the pandemic in comparison with the worldwide financial system, their present financial outlook is worse and restoration is slower in comparison with pre-pandemic estimates. This displays a number of components, together with the challenges confronted by many low-income international locations, in comparison with hic-income counterparts, in offering fiscal reduction to deal with the home results of COVID-19 in addition to the variation within the severity of pandemic-related disruptions and now, vaccine entry. Furthermore, this case is unstable. A number of PEPFAR international locations are experiencing a major improve in COVID-19 instances because of the emergence of the Omicron variant, and most are on the opposite aspect of the “vaccine fault line”, not anticipated to acquire important vaccine entry till nicely into this subsequent 12 months or past. The continuing results of COVID-19 and the fluidity of the worldwide surroundings make it tough to foretell what the final word affect can be on PEPFAR international locations’ economies and their HIV responses sooner or later. Current PEPFAR information additionally present that financial issues are worse in international locations with excessive HIV prevalence. This mixture of things could have explicit implications for the U.S. position in supporting the HIV response, together with the extent to which the U.S. seeks to offer broader financial reduction or extra well being funding to PEPFAR international locations and/or focus extra efforts on their vaccine roll-out, a few of which has already been piloted in choose PEPFAR international locations.