COVID-19: World Bank forecasts global ‘economic shrinkage’

World Bank
World Bank

The global economy is projected to shrink by about 5.2 per cent this year under the massive ravaging impact of the coronavirus pandemic, the World Bank said on Thursday.

The bank said the severe contraction in the economy, which compelled various stimulus interventions by most countries to contain the impact and save their economies from going under, would worsen the global poverty level.

During the newly launched growth forecasts of June from the Global Economic Prospects, the World Bank updated global estimates of the impact of coronavirus.

Its forecast shows that between 71 and 100 million people around the world risk being pushed into extreme poverty as a result of the impact of the pandemic.

Recovery from COVID-19, the bank said, would provide an opportunity for countries to build resilience, improve inclusion and ensure economic growth.

This new economic series, the World Bank said, would focus on the ideas and actions that would help countries as they look beyond the pandemic.

Joined by President of the World Bank Group, David Malpass; the Executive Director of UNICEF, Henrietta Fore, and the African Union Commissioner, Josefa Sacko, the discussion focused on how food security was impacted by COVID-19.

Other issues discussed included Gender and COVID-19 and how the World Bank is helping as well as efforts to ensure sustainable recovery as countries around the world respond to the COVID-19 emergency.

On lending and finance, the group focused on alternative lenders using fintech—such as crowdfunding platforms and marketplace lenders— as an increasingly important source of financing for small and medium businesses.

Disaster risk management, the Group noted, has become a new normal, as disasters and health emergencies can come without warning.

It stressed the need for constant dialogue between the entities in charge of finance, risk management and health emergencies to allow for better preparation and planning for a timely response and recovery during crisis.

At the peak of the crisis, the World Bank said about 1.6 billion children across the world were not in school.

Specifics

However, as schools look to re-open, the group identified four messages education systems should deliver to school leaders to improve student well-being and engagement.

World Bank said its calculations on regional perspective suggest that around 20 million jobs would be destroyed in the Latin America and Caribbean region this year.

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The current crisis, it said, although deep and painful, offers the unique opportunity to reach broad social and political agreements to move toward these goals.

On food security, the World Bank said even before the global COVID-19 pandemic broke out, food insecurity was becoming a serious concern throughout sub-Saharan Africa.

“Countries must take action now to build more resilient and productive food systems in the region to support food security during this pandemic and beyond,” it said.



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