Recession due to COVID-19 is being termed as the worst one since 1870s when World War I happened, says World Bank president David Malpass
New Delhi: The global economy is constantly plunging into a severe low and will shrink by 5.2% by the end of this year due to the massive lockdown of economic activities around the globe over coronavirus pandemic, the World Bank said on Monday.
The recession due to COVID-19 is being termed as the worst one since 1870s when World War I happened, said World Bank president David Malpass in the latest report of Global Economic Prospect.
"The speed and depth with which it has struck, suggests the possibility of a sluggish recovery that may require policymakers to consider additional interventions," he said.
For many developing and under developed nations, effective financial support and mitigation measures are very hard as majority of the employment is in informal sectors, he added.
According to the report, economic activity among advanced economies is anticipated to shrink by 7% in 2020 as local demand and supply, trade and finance have been severely affected due to the outbreak of the pandemic.
According to the report published by the World Bank, per capita incomes are expected to witness a decline of 3.6%, which will lead millions of people into extreme poverty in 2020.
The countries to bear the hardest brunt will be where the pandemic has been the most severe and where there is heavy reliance on global trade, tourism, commodity exports and external financing, the report added.
"This is a deeply sobering outlook, with the crisis likely to leave long-lasting scars and pose major global challenges," World Bank Group Vice President for Equitable Growth, Finance and Institutions, Ceyla Pazarbasioglu said.