World Bank predicts worst economic recession since World War II

11 months ago

The World Bank predicts a 5.2% drop in the global economy in 2020 due to the COVID-19 pandemic

This is stated in the report of the World Bank “Perspectives of the world economy” for June 2020.

It is noted that the decline in the global economy this year will be the deepest since the Second World War, and the reduction in per capita production will affect the largest share of countries since 1870.

A sharp decline in per capita income is expected in all regions.

According to the forecast, in countries with developed economies in 2020 a decrease in economic activity by 7% is expected. In emerging and developing economies, a 2.5% decline is projected this year – the first comprehensive recession in this group of countries in at least sixty years.

Per capita income is expected to fall by 3.6% this year – and this will plunge millions of people into extreme poverty.

The hardest hit is for those countries in which the pandemic has become particularly severe and that depend heavily on world trade, tourism, export of raw materials and external financing.

It is also possible that interruptions in access to schooling and primary health care will have a lasting negative impact on the development of human capital.

According to experts, if events develop according to a pessimistic scenario, then this year the global economy can expect a fall of as much as 8%, and then, in 2021, a sluggish recovery growth of a little more than 1%.

At the same time, the US economy is forecasting a decline of 6.1% this year. Eurozone output will fall by 9.1%. And the Japanese economy may shrink by 6.1%.

The bank’s leadership urges the world community to “unite to find ways of recovery.”

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