GDP is expected to go down by 5.2% globally and there will be a 3.6% decrease in per capita incomes. Developing economies will be most affected, especially in terms of poverty. This is what emerges from a World Bank report.
In the latest report on the state of the global economy, drawn up by the World Bank , it is estimated that the Covid-19 pandemic may trigger the worst recession since 1870 and risks fostering a dramatic increase in poverty levels. The experts who edited the document took into consideration the economic situation of 183 countries and it turned out that 90% will suffer a considerable drop in GDP. The data collected speak of an average reduction of about 5.2%: more than double compared to the financial crisis of 2008 and among the worst since the Second World War onwards.
However, developing countries and emerging economies will suffer most from this situation : there will be poorer people and the closure of schools and the difficulty of accessing primary health care will have repercussions, in the long run, also on capital development human .
The contents of the report
“The global community must come together to find ways to think of the most solid recovery possible so as to prevent more people from becoming poor or unemployed,” said Ceyla Pazarbasioglu , vice president of the World Bank. In fact, the social distancing measures that led to the closure of activities and services will affect demand and supply levels, trade and financial activities, so much so that per capita incomes are expected to decrease by 3.6% and millions of people they could come to live in conditions of extreme poverty. Last month, the latter stood at around 60 million, but according to the World Bank they are sure to increase.
“The recession triggered by the spread of Covid-19 is singular in many respects: advanced economies will experience a situation similar to the post-war one and, for the first time, developing countries will have to face the effects of an economic contraction” , explained the director of the World Bank, Ayhan Kose. The solution? For Kose, “policy makers should take measures to support the relaunch of activities and services” especially if the pandemic were to continue longer than necessary. Indeed, if the lifting of containment measures lasts, global growth will be 4.2% in 2021, but if instead they were to be reintroduced, the GDP could fall by 8% and the recovery in 2021 would be just over 1%.