World Bank projects global economy to shrink by 5.2 pct in 2020

Advanced economies are expected to grow 3.9 percent next year and EMDEs could bounce back by 4.6 percent, according to the report. “In many countries, deep recessions triggered by COVID-19 will likely weigh on potential output for years to come,” the report said.

“This is a deeply sobering outlook, with the crisis likely to leave long-lasting scars and pose major global challenges,”

said Ceyla Pazarbasioglu, World Bank Group vice president for Equitable Growth, Finance and Institutions.

The report also noted that per capita incomes are expected to decline by 3.6 percent, which will tip millions of people into extreme poverty this year. Last week, World Bank Group President David Malpass said the pandemic is threatening to push over 60 million people into extreme poverty this year.

“The poor and the most vulnerable are hardest hit, adding to the deep inequality caused by growth that was often too slow to great jobs, higher medium incomes and better living standards,” Malpass told reporters at a press call on the launch of the analytical chapters of the report.

Facing the pandemic, Malpass said the World Bank will work to limit the harm and help countries prepare for recovery so they can rebuild better and stronger than before.
The World Bank president said in April that the international lender is mobilizing up to 160 billion U.S. dollars over the next 15 months to support countries fighting the COVID-19 pandemic.

“Our first order of business is to address the global health and economic emergency,” Pazarbasioglu said. “Beyond that, the global community must unite to find ways to rebuild as robust a recovery as possible to prevent more people from falling into poverty and unemployment.”

In the report, the World Bank also urged governments to take steps to alleviate the adverse impact of the crisis on potential output by placing a renewed emphasis on reforms that can boost long-term growth prospects.

“The pandemic has laid bare the weaknesses of national health care and social safety nets in many countries,” the report noted.

“It is necessary to put in place social benefit systems that can provide an effective, flexible, and efficient safety net during disasters.”

Read alsoHungary jumps ahead in World Bank Paying Taxes ranking

Source: Xinhua