As the deadly coronavirus pandemic swept across the globe, many countries had no other choice but to impose mandatory stay-at-home orders, travel restrictions, and economic lockdowns as a means of containing the spread. As some restrictions are now being lifted given that the peak of the pandemic has slightly subsided, the economic consequences from the pandemic are becoming more evident.
According to The World Bank’s June 2020 Global Economic Prospects report, the pandemic has caused the entirety of the global economy to plunge into a severe recession not seen since the Second World War. The World Bank is anticipating a global contraction of 5.2% for the remainder of 2020, meanwhile per capita income is anticipated to fall by 3.6%. The countries with advanced economies are expected to decline by 7%, while emerging market and developing economies (EMDE) are projected to decline by 2.5%.
If the pandemic infection rate subsides enough for countries to lift restrictions by mid-2020, then under the baseline scenario global growth could pick up by an overall 4.2% in 2021, with advanced economies increasing by 3.9% and EMDEs by 4.6%. However, in a worse case scenerio such as a second wave of the virus, the global economy could fall by 8% for the remainder of the year, with EDMEs falling by nearly 5% alone. The recovery in 2021 would remain relatively stagnant at only 1%.
Meanwhile, The World Bank predicts the US and Japan’s economies to decline by 6.1% for the remainder of 2020, and output in the Euro Area to fall by at least 9.1%.
Information for this briefing was found via The World Bank. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.