United Nations report predicts world economy to shrink by 3 percent
Reportedly the United Nations forecast wednesday that the COVID-19 pandemic will shrink the world economy by 3.2 per cent this year, the sharpest contraction since the Great Depression in the 1930s. The UN’s mid-year report said the impact of the coronavirus crisis is expected to slash global economic output by nearly $8.5trillion over the next two years, wiping out nearly all gains of the last four years.
In january, before COVID-19 became a pandemic, the UN had forecast a modest acceleration in growth of 2.5 per cent in 2020. But UN chief economist Elliott harris told a news conference launching the report that the global economic outlook “has changed drastically” since then, with the pandemic’s death toll climbing toward 300,000. He said “With the large-scale restrictions of economic activities and heightened uncertainties, the global economy has come to a virtual standstill in the second quarter of 2020".
“We are now facing the grim reality of a severe recession of a magnitude not seen since the Great Depression.”According to the report, nearly 90 per cent of the world economy has been under some form of lock-down, disrupting supply chains, depressing consumer demand and putting millions out of work. The 3.2 per cent contraction in the global economy forecast by the United Nations 5 per cent in developing countries and 0.7 per cent in developing countries is slightly higher than the 3 per cent plunge forecast by the international Monetary Fund in mid-April for 2020. But in a worst-case scenario, the U.N. said the global economy could shrink by 4.9 per cent in 2020 if a second wave of COVID-19 infections flares up and lockdowns continue into the third quarter of the year.