Forecasts by World Bank reveals that the global economy will shrink by 5.2 per cent this year, as a result of the coronavirus pandemic which led to a sudden economy shut down as a measure to contain its spread.
This was highlighted in its June 2020 Global Economic Prospects.According to the report, the sudden shock which took the world unawares, have plunged the global economy into severe contraction,
resulting to the deepest recession ever since the end of the secondWorld War. At that time, majority of the world economies experienced a decline in per capita output.
Activities in advanced economies is anticipated to shrink by 7% in
2020 as domestic demand and supply, trade, and finance have been adversely disrupted, while, Emerging Market and Developing Economies (EMDEs) are expected to shrink by 2.5% in 2020. The report admits that per capita incomes will decline by 3.6%, leading to the extreme poverty of millions of people.
The countries with the severe cases of the pandemic are the hardest hit especially where global trade, tourism, commodity exports, and financing are heavily relied on. Emerging Market and
Developing Economies (EMDEs) will be vulnerable to this unwelcoming shock that has posed a magnified disruption from region to region.
As if that is not enough, interruptions in schools and other key sectors of the economy are likely to have a negative impact on humancapital development.