On 13th May 2020, In the United Nations(UN) World Economic Situation and Prospects(WESP) mid year report forecast that the COVID-19 pandemic situation will shrink the world economy by 3.2% in 2020 this is the sharpest contraction since the 1930’s Great Depression and India’s economy to grow at 1.2% in 2020.
Key Points:
i.The mid 2020 report of WESP states that the COVID-19 pandemic situation is expected to cut off the global economic output by arournd 8.5 trillion USD in the next two years which will nearly wipe out all the gains of the past four years.
ii.The UN forecast in January before the COVID-19 pandemic expected a modest acceleration of growth by 2.5% in 2020
iii.Around 90% of the world economy is under the form of lockdown, disrupting supply chain, depressing consumer demand and unemployment.
iv.The 3.2% contraction in the global economy is 5% in developing countries and 0.7% in developing countries and is higher than 3% plunge forecast by the International Monetary Fund in mid-April 2020
v.The UN predicts that in the worst case scenario if the second wave of COVID-19 infections hits, the global economy would shrink by 4.9% in 2020.
vi.The report forecast that India’s economy to grow at 1.2% in 2020 which is deterioration from the growth of 4.1% in 2019. In 2018 the economy of India grew at 6.8% and expected to recover slightly and make 5.5% growth in 2021.
vii.The lockdown in India is expected to result in an economic depression at 1.2% lower than the growth in 2019.
viii.The pandemic is expected to exacerbate poverty and inequality with an estimated 34.3 million people to fall below the line of extreme poverty of 1.90USD a day in 2020 and 56% of them are the people of Africa.
About UN Department of Economic and Social Affairs (DESA):
Under Secretary-General(USG)- Liu Zhenmin
Assistant Secretary-General (ASG)- Elliott Harris and Maria-Francesca Spatolisano
Headquarters- New York
