The coronavirus pandemic, as well as measures, introduced by the governments to contain the spread of the virus, have thrown the world economy in turmoil. Hopefully, countries started to lift restrictions. According to a report prepared by the World Bank, the globe will have its deepest global recession in 80 years.
The number of cases surpassed 7 million. The U.S. has the largest number of cases than any other country in the world. As stated above, many countries implemented various restrictions. To accomplish this goal, authorities temporarily closed businesses.
Based on the information provided by the World Bank, a worldwide gross domestic product will contract 5.2% in 2020. It means that despite the unprecedented fiscal and monetary policy, the global economy will shrink by 5.2%.
As a reminder, governments around the world are working hard to boost the economy. Moreover, they are ready to spend hundreds of billions of dollars to avert the financial crisis.
World Bank and the global economy
Importantly, advanced economies such as the United States and Europe, are projected to shrink by 7%. For example, the World Bank expects the U.S. to contract by 6.1%. Hopefully, the U.S. economy will get back on track in 2021.
Moreover, this quarter will almost certainly be the worst for the Western world. Most of the countries in Asia suffered the biggest losses inflicted by the outbreak in the first months of this year.
Based on this report, the world’s second-largest economy is expected to grow by 1% in 2020. For instance, last year the economy of China increased by 6.1%.
It is worth mentioning that the pandemic recession will continue to affect the economy. For instance, global trade and supply chains will erode to some extent. Furthermore, millions of people across the world lost their jobs. As a result, people in different parts of the U.S. and the world are looking for a job.
The situation is more difficult in the case of emerging economies. Governments should work with a private sector to minimize the damage caused by the coronavirus pandemic.