The World Bank has updated its forecast for the world economy, and experts expect it to decline this year, according to the world economic Outlook report for June 2020.
“The coronavirus pandemic and quarantine measures to contain it have had a sharp and large-scale shock effect on the world economy, plunging it into a deep recession. According to World Bank forecasts, this year, the economy of the planet will be squeezed by 5.2 percent. This decline will be the deepest since World War II, and the decline in per capita output will affect the largest share of countries since 1870.”
At the same time, a recovery is expected in 2021 — global GDP growth will be 4.2 percent, not 2.6 percent, as expected in January.
In particular, the Bank expects the total GDP of advanced economies to fall by seven percent by the end of this year, and in emerging markets and developing countries — by 2.5 percent, and this is the first “comprehensive recession in this group of countries for at least 60 years.”
Analysts believe that it will be most difficult for those countries where the disease has spread especially actively, as well as those that are severely dependent on world trade, tourism, raw material exports, and external financing.
“Current events have already caused an unprecedented rapid and sharp revision of forecasts for global economic growth in the downward direction. Based on experience, we may still have to revise growth forecasts downwards, which means that policymakers may need to be prepared to take additional measures to stimulate business activity,” said Ayhan Kose, Director of the World Bank’s economic development Outlook Department.