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COVID-19 will shrink Global Economy by 3.2% in 2020
Published on: 2020-05-14
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In this May 7 2020 file photo a pedestrian walks by The Framing Gallery closed due to the COVID 19 pandemic in Grosse Pointe Mich

In this May 7, 2020, a pedestrian walks by The Framing Gallery, closed due to the COVID-19 pandemic, in Grosse Pointe, Mich

Against the backdrop of a devastating pandemic, the global economy is projected to contract sharply by 3.2 percent this year, according to the United Nations World Economic Situation and Prospects mid-2020 report published on Wednesday.

A closed restaurant in Milans Galleria Vittorio EmanueleA closed restaurant in Milan’s Galleria Vittorio Emanuele

The global economy is expected to lose nearly US$8.5 trillion in output over the next two years due to the COVID-19 pandemic, wiping out nearly all gains of the previous four years. The sharp economic contraction, which marks the sharpest contraction since the Great Depression in the 1930s, comes on top of anemic economic forecasts of only 2.1 percent at the start of the year.

An employee produces toilet paper for exporting on the production line of a paper companyAn employee produces toilet paper for exporting on the production line of a paper company

The report estimates that GDP growth in developed economies is expected to plunge to minus 5 percent in 2020. A modest, 3.4 percent growth — barely enough to make up for the lost output — is expected in 2021. World trade is forecast to contract by nearly 15 percent in 2020 amid sharply reduced global demand and disruptions in global supply chains.
 

Nearly 90 percent of the world economy has been under some form of lockdown, disrupting supply chains, depressing consumer demand and putting millions out of work. Under the baseline scenario, the developed economies are expected to contract by 5 percent in 2020, while the output of developing countries will shrink by 0.7 percent.

A chain is seen on the gates of a closed shopping arcade in Leeds city center West Yorkshire on April 14 2020A chain is seen on the gates of a closed shopping arcade in Leeds city center, West Yorkshire, on April 14, 2020

The pandemic will likely cause an estimated 34.3 million people to fall below the extreme poverty line in 2020, with 56 percent of this increase occurring in African countries. An additional 130 million people may join to the ranks of people living in extreme poverty by 2030, dealing a huge blow to global efforts for eradicating extreme poverty and hunger. The pandemic, which is disproportionately hurting low-skilled, low-wage jobs, while leaving higher-skilled jobs less affected - will further widen income inequality within and between countries.
 

Facing an unprecedented health, social and economic crisis, governments across the world have rolled out large fiscal stimulus measures — equivalent to an estimated 10 percent of GDP — to combat the pandemic and minimize its livelihood impacts. However, the depth and severity of the crisis foreshadows a slow and painful recovery.
 

The report highlights that the pandemic could foster a new normal, fundamentally reshaping human interactions, inter-dependence, trade and globalization, while accelerating digitalization and automation. A rapid surge in economic activities online will likely eliminate many existing jobs, while creating new jobs in the digital economy. The net wage and employment effects could be negative, further aggravating income inequality.

A nearly empty St. Marks Square in Venice Italy in MarchA nearly empty St. Mark’s Square in Venice, Italy, in March

Most developing economies — saddled with chronic fiscal deficits and already high levels of public debt — are finding it very hard to implement sufficiently large fiscal packages, which have thus far averaged less than 1 percent of their GDP. Falling exports and growth are rapidly undermining the debt sustainability of many developing countries, particularly those that are heavily dependent on commodities, tourism revenues or remittances. Growing debt distress poses an enormous challenge to these countries, further constraining their ability to implement much-needed stimulus measures.
 

The report cautions against the risk of large fiscal and monetary stimulus measures — with trillions of dollars of new liquidity injected into the financial system — contributing to the quick recovery of equity and bond prices, while ignoring productive investments. Global liquidity per capita surged since the global financial crisis in 2008, while productive investment per capita stagnated.
 

联合国预计2020年全球经济萎缩3.2%

联合国13日发布的《2020年世界经济形势与展望年中报告》显示,受新冠疫情影响,2020年全球经济预计萎缩3.2%。
 

报告预计,2020年,发达国家经济将萎缩5%,发展中国家经济萎缩0.7%。2020年至2021年,全球经济产出累计损失将达8.5万亿美元,几乎抹去过去4年的全部增长。
 

受疫情影响,全球经济遭受重挫,供应链中断、需求被抑制。报告预计,2020年世界贸易将收缩近15%。
 

联合国首席经济学家埃利奥特•哈里斯当天在视频发布会上表示,世界经济“从危机中复苏的速度和强度不仅取决于公共卫生措施减缓病毒传播的有效性,也取决于各国保护民众、特别是最脆弱社会成员就业和收入水平的能力”。
 

受疫情影响,2020年全球将有约3430万人跌入“极端贫困”,其中56%生活在非洲。报告说,到2030年,“极端贫困”状态下的人口将新增1.3亿,这对全球消除极端贫困和饥饿的努力是一个“巨大打击”。
 

现阶段,不少国家推出经济刺激措施应对健康、社会和经济危机。不过,联合国报告警告,不要贸然采取大规模财政和货币刺激措施,例如向金融市场注入数万亿美元流动性,导致股票和债券价格迅速回升,却忽视生产性投资。
 

大多数发展中经济体公共债务水平高,很难实施大规模经济刺激计划。同时,出口下滑正迅速破坏许多发展中国家债务可持续性,进一步限制它们实施刺激措施。

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