With the governments imposing large-scale restrictions on economic activities to halt the spread of coronavirus, the global economy has come to a virtual standstill.
A report by the United Nations Department of Economic and Social Affairs has projected that the world economy is set to lose nearly $8.5 trillion over the next 2 years.
UN has predicted that the world economy will contract by 3.2 per cent in 2020 amid the coronavirus crisis, the sharpest contraction since the Great Depression in the 1930s.
But in the worst-case scenario, it said the global economy could contract by a further 0.5 per cent in 2021 if a new wave of infections and lockdowns continues in the third quarter, which ends September 30.
The UN report projects that the economic output of developed countries will plunge to minus 5 per cent and below, meanwhile, the GDP of the developing countries will contract by 0.7 per cent in 2020.
The report also forecast a 15 per cent contraction in world trade in 2020 as a result of sharply reduced global demand and disruptions in global supply chains.
COVID-19 is likely to push more than 34 million people into extreme poverty, the report added.
India’s GDP growth rate dips to 1.2% for FY 2020-21
The UN has slashed India’s projected growth rate to 1.2 per cent in 2020, a further deterioration from the already slowed growth of 4.1 per cent in 2019.
However, India, which grew at 6.8 per cent in the fiscal year 2018, is forecast to recover slightly and clock a 5.5 per cent growth rate in 2021.
“The national lockdown in India, for example, is expected to depress economic growth to just 1.2 per cent, much lower than the already disappointing growth in 2019,” the report said.
The abrupt halt of commercial activity threatens to impose economic pain so profound and enduring in every region of the world at once that recovery could take years.
(With inputs from agencies)