(Image: AAP/Bianca De Marchi)

The exuberance of stock markets in 2020 appeared at times irrational. As 2021 begins and economic prognostications turn foul, frothy financial markets begin to look positively lunatic. This week, the US S&P 500 of top stocks hit yet another record high, as did the UK market.

Rising markets were perhaps not the immediate response expected by the authors of a newly released World Bank flagship report. The report, on global economic prospects, contained grim portents:

Global growth is projected to moderate to 3.8% in 2022, weighed down by the pandemic’s lasting damage to potential growth. In particular, the impact of the pandemic on investment and human capital is expected to erode growth prospects in emerging market and developing economies (EMDEs) and set back key development goals.