GDP growth: Failure to create resilience to crisis could reduce annual growth by 1-5%

A new study from the World Economic Forum (WEF) showed on Friday that climate change, COVID-19 and the failure to resilient the crisis caused by the war in Ukraine would cost 1-5 percent of annual global GDP growth. “Climate change, CoVID-19 and the war in Ukraine are world-sized events that are accelerating the crisis from growing hunger, refugee flows and supply chain disruptions, energy prices and global growth. Companies and countries need to move faster than reactive risk management.” Recovery so that they are better prepared for the next crisis, “the WEF said.

The results of the study, published ahead of the WEF Annual Meeting 2022 in Davos, suggest that “the cost of failure to build resilience to crisis is between 1 percent and 5 percent of annual global GDP growth.”

For example, the decline in the workforce during Kovid-19 slowed growth by 3.6 percent in some countries, while the current crisis disrupted power and supply chains by approximately 1-2.5 percent of global GDP.

Resilience involves a set of strategic capabilities to achieve long-term, sustainable and inclusive growth, while a shared structure is a prerequisite for an integrated, systematic approach to resilience.

“It will provide organizations with guidelines on a common resilient language, structure and purpose, and how to maintain and improve sustainability and inclusion in an environment of more frequent crises and disruptions,” WEF said.

The United Nations, the WEF, the McKinsey Global Institute, the International Monetary Fund and other leading organizations estimate that a significant portion of annual GDP growth will depend on the level at which companies and societies develop resilience.

“Growth can be expected to vary from 1 percent to 5 percent globally, depending on how leaders respond to many challenges, including climate change, energy transfers, supply chain disruptions, access to health care, and income, gender and racial inequality.” Said.

WEF, in collaboration with McKinsey & Company, said it was also launching the Resilience Consortium, a new public-private leadership effort to drive global resilience. The consortium brings together leaders from the public and private sectors who are committed to advancing global resilience – across regions, economies and industries.

The goal is to develop resilience and a shared, broad vision of policy-makers and business leaders to recognize opportunities and help lay the groundwork for sustainable and inclusive, long-term global growth.

“Building greater resilience has become a defining order for this generation. The war in Ukraine is having a devastating effect not only on the people of the region but also on global commodity prices that could be politically motivated and humanitarian in other parts of the world,” said Borje Brande, President of the WEF. Crisis “.

“More concerted action and coordination between the public and private sectors is needed to mitigate risks and sustain growth against disruptive shocks, especially among the most vulnerable populations. Policy decisions and financial commitments will determine the future course of the planet today, the economy and society. Time, ”he added.

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