Social Unrest is Rising, Adding to Risks for Global Economy

IMF Blog, May 20, 2022

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IMF’s Reported Social Unrest Index counts media mentions of words associated with unrest across 130 countries.
The fraction of countries experiencing large spikes in this index rose to around 3 percent in February.
That level is close to the index’s highest levels since the onset of the pandemic.
After a pause in popular protest during the first year of the pandemic, people are returning to the streets.

Prior to the pandemic, unrest rose globally, with a notable wave beginning in Chile and spreading through parts of Latin America in October and November 2019.
Significant unrest around the same period occurred in the Middle East, including Algeria, Iran, Iraq, and Lebanon.
Unrest declined sharply at the start of the pandemic amid increased social distancing (voluntary and mandatory), consistent with experience during past pandemics.
Notable unrest events in 2020 included:
- United States: large racial justice protests.
- Ethiopia: heightened inter-ethnic tensions.
- Large anti-government protests in Brazil, Lebanon, and Belarus.
More recent unrest (later stages of the pandemic) occurred in both advanced and emerging and developing economies:
- Advanced economies with relatively rare unrest: Canada, New Zealand, Austria, the Netherlands (often anti-government or anti-lockdown motives).
- Emerging markets and developing economies: Kazakhstan and Chad (anti-government protests); Burkina Faso (coup); Tajikistan (regional protests); Sudan (constitutional crisis).

Two important factors could increase the risk of future unrest:
- Relaxation of restrictions and diminished public concern about catching COVID in crowds, reducing pandemic-related disincentives for protest.
- Public frustration with rising food and fuel prices.
IMF notes economic causes of civil disorder are complex and unrest is exceptionally hard to predict.
Historical association: steep price increases for food and fuel have been associated with more frequent protests.

Social unrest can pose a risk to the global economy’s recovery through lasting impacts on economic performance.
IMF staff research finds that 18 months after the most serious unrest events, gross domestic product is typically about 1 percentage point lower than it would have been otherwise.
Mechanisms include consumers becoming spooked by uncertainty and lost output in manufacturing and services.

Although social unrest remains low relative to pre-pandemic levels for now, the lifting of pandemic-era restrictions and the continued cost-of-living squeeze mean protests may yet increase.
Any rise in social unrest could impose significant economic costs and add to risks facing the global economy.

Philip Barrett, May 20, 2022 — Social Unrest is Rising, Adding to Risks for Global Economy