Positive spillovers from strengthening global activity, better international control of COVID-19, and strong domestic activity in agricultural commodity exporters are expected to gradually help lift growth. Output in Sub-Saharan Africa (SSA) is expected to expand a modest 2.8 percent in 2021, and 3.3 percent next year. These risks could interact and further undermine living standards, increase deprivation for vulnerable communities, and heighten food insecurity. The region is also exposed to risks from conflict and social unrest, high debt in some economies, and unfavorable commodity price developments. Limited vaccine progress suggests that the pandemic may intensify again, new variants may emerge, and mobility restrictions may be reimposed. Risks to the regional outlook remain predominantly to the downside. By 2022, regional activity is expected to remain 6 percent below pre-pandemic projections. COVID-19 resurgences have also worsened the outlook for oil importers.
Higher oil prices have bolstered growth prospects in oil exporters, but the improvement has been limited by new virus outbreaks and mixed vaccination progress. Output in the Middle East and North Africa region is projected to grow by a subdued 2.4 percent in 2021, only half the pace of the recovery that followed the 2009 global recession. Key downside risks include a slower-than-expected COVID-19 vaccine rollout further surges in new COVID-19 cases, including from variant strains of the virus adverse market reactions from social unrest or strained fiscal conditions and disruptions related to social unrest or to climate change and natural disasters. Although spillovers from robust growth and additional fiscal support in the United States through trade and confidence channels are an upside risk to the baseline forecast, the balance of risks is tilted to the downside. Per capita income losses will still be deep in 2022, particularly for small island economies in the Caribbean. The rebound will be supported by moderate progress in vaccine rollouts, relaxation of mobility restrictions, and improved external economic conditions. Growth in Latin America and the Caribbean (LAC) is projected to be 5.2 percent in 2021-a rebound insufficient to return GDP to 2019 levels this year after a historically deep recession in 2020. On the upside, risks include accelerated vaccination rollouts and greater-than-expected spillovers from recoveries in the United States and other major economies. Disruptions from natural disasters are a constant source of severe downside risk for many countries, especially island economies. Downside risks to the forecast include, the possibility of repeated and large COVID-19 outbreaks amid delayed vaccinations heightened financial stress amplified by elevated debt levels and the possibility of more severe and longer-lasting effects from the pandemic, including subdued investment and eroded human capital. The pandemic is expected to dampen potential growth in many economies, especially those that suffered most from extended outbreaks of COVID-19 and the collapse of global tourism and trade. Nevertheless, output in two-thirds of the countries in the region will remain below pre-pandemic levels until 2022. Growth in East Asia and Pacific (EAP) is projected to accelerate to 7.7 percent in 2021, largely reflecting a strong rebound in China.
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