The global economy is expected to shrink by 5.2% in 2020 due to the effects of the Covid-19 pandemic. The World Bank warned in a statement on Monday.
The World Bank expects the recessions triggered by the Pandemic to have lasting down effects through reduced investment. ” An erosion of Human Capital through lost work ….. Fragmentation of global trade and supply linkages”.
The Bank urges economies in the emerging markets to strengthen public health systems, address challenges posed by informality and implement reforms to support strong sustainable growth when the Pandemic is over.
The Pandemic is expected to plunge large per capita income of countries for the first time since 1870.
Advanced countries are expected to shrink 7%, while emerging markets at 2.5%, which would be the weakest growth for emerging countries for the first time in 60 years.
East Asia and Pacific with only grow by 0.5%, South Asia with shrink by 2.7%, Sub Saharan Africa by 2.8%, Middle and North Africa by 4.2%, Europe and Central Asia by 4.7% and Latin America by 7.2%.
The World Bank expects energy and Industrial Commodities nations to be the hardest hit.
” The pandemic and efforts to contain it have triggered an unprecedented collapse in Oil demand and a crash in Oil prices”.
World Bank President, David Malpass urges the the speed of recovery friends on effectiveness of governments to support programmes which are critical on how policy makers respond to the new reality.