On September 22, 2020 As per the United Nations Conference on Trade and Development (UNCTAD)’s Trade and Development Report 2020– From global pandemic to prosperity for all: Avoiding another lost decade, global economy is expected to contract by 4.3%(-4.3%) in 2020, with global output falling short by over USD 6 trillion of the estimates by the economists before the spread of COVID-19. It also has projected India’s economy to contract by 5.9%(-5.9%) in 2020 and expects the economy to rebound to 3.9% in 2021.
- -5.9% is expected to be translated into a permanent income loss.
Key Projections
World Economy
Trade to shrink by around one-fifth in 2020, FDI(Foreign Direct Investment) flows by till 40% and remittances to drop by over USD 100 billion
India
i.The baseline scenario is a sharp recession in 2020 as the stringent lockdown measures, to prevent the spread of the virus have halted, many productive activities across the country
ii.The rebound 3.9% in 2021 is in accordance with the growth rates of the Indian economy in recent years.
Other countries GDP
US– GDP to fall 5.4% in 2020 and recover 2.8% in 2021.
China– Economic growth of 1.3% in 2020 and have a massive growth of 8.1% in 2021. It is the highest economic growth rate in the world
Important Projections in 2021
i.There will be an upward trend of unemployment, more companies will face the threat of bankruptcy, supply chains will be delicate, confidence will be shaken, demand will be shaky.
ii.Both public and private sectors across the world will rise significantly from the historically high levels registered before the crisis.
Poverty
90 to 120 million people in the developing world will be pushed into extreme poverty, and about 300 million will face food insecurity.
Key Info
i.The report pointed out that wrong policy steps(omitting the experience of the last decade) may trigger further shocks which will obstruct recovery and will usher in a lost decade.
ii.If governments choose premature fiscal tightening in an effort to reduce public debt and businesses adopt an aggressive cost-cutting strategy in an effort to boost exports, recovery is likely to emerge in many countries with a double-dip recession by 2022.
Recent Related News:
According to The report titled, ’Implications of AI on the Indian Economy’ by National Association of Software and Services Companies (NASSCOM) along with the Indian Council for Research on International Economic Relations (ICRIER) and Google, a unit increase(measured as the ratio of AI to total sales) in Artificial Intelligence(AI)
intensity can result in a 2.5% increase in India’s Gross Domestic Product(GDP) in the immediate term.
About United Nations Conference on Trade and Development(UNCTAD):
Secretary-General– Mukhisa Kituyi of Kenya( 7th Secretary-General)
HeadQuarters– Geneva, Switzerland
