Photo: Screenshot of the latest world bank tweet announcing the deepest recession since WW2
In a recent report released on its website, the World Bank has indicated that global economic growth is expected to decline by 5.2%. It further added that “the speed of forecast downgrades suggests a further downward revision is possible.”
It further added that in developed nations, economic activity is expected to decline by seven per cent due to disruptions in demand and supply , and trade and finance activities.
As a group, emerging market and developing economies are due to shrink by 2.5 per cent, with per capita incomes, meanwhile, are forecast to fall by 3.6 per cent, causing millions to fall into extreme poverty, the report said.
“This is a deeply sobering outlook, with the crisis likely to leave long-lasting scars and pose major global challenges,” said Ceyla Pazarbasioglu, the World Bank Group’s Vice President for Equitable Growth, Finance and Institutions.
To deal with these newly analyzed effects, Pazarbasioglu sees the need to unite to address the crisis. “Our first order of business is to address the global health and economic emergency,” she said.
“Beyond that, the global community must unite to find ways to rebuild as robust a recovery as possible to prevent more people from falling into poverty and unemployment.” In its previous semi-annual Global Economic Report, issued in January before the World Health Organization (WHO) declared the COVID-19 outbreak to be a pandemic on 11 March, the World Bank saw the global economy growing 2.5 per cent this year, up from 2.4 per cent in 2019, thanks to a gradual recovery in trade and investment.
Previously, the World Bank released analytical chapters from the latest Global Economic Prospects report that emphasized that developing countries and the international community can take steps now, to speed recovery, after the worst of the health crisis has passed, in order to blunt some long-term adverse effects.
“Current estimates show that 60 million people could be pushed into extreme poverty in 2020 (and) these estimates are likely to rise further, with the reopening of advanced economies the primary determinant”, said World Bank Group President, David Malpass.
“Policy choices made today – including greater debt transparency to invite new investment, faster advances in digital connectivity, and a major expansion of cash safety nets for the poor – will help limit the damage and build a stronger recovery,” he stated.
According to the Global Economic Prospects report, the United States economy is forecast to contract 6.1 per cent this year, while euro zone output is expected to shrink around 9.1 per cent. Japan’s economy is anticipated to retreat 6.1 per cent.