No.5
Special Report
COVID-19
15 July 2020
Addressing the growing impact of COVID-19 with a view to reactivation with equality: new projections A. A synchronized global crisis1
The global economy will undergo the deepest recession since the Second World War and per capita gross domestic product (GDP) will shrink in 90% of countries, with unprecedented synchronization.2 Global GDP will contract by 5.2% in 2020. Developed economies
B. Decoupling financial dynamics from the drop in activity.............................. 5 C. New projections of growth, unemployment, poverty and inequality................................. 8
The gradual lifting of health restrictions and the implementation of
D. Fiscal and monetary policies to address the crisis...................................................... 12
However, projections for the year as a whole have deteriorated
since the beginning of April. For the first time in decades, Chinese authorities have not set an annual growth target, and forecasts for the economy’s expansion stand at just 1.0%, its lowest rate in more than 40 years. The Federal Reserve projects that United States GDP will contract by 6.5%, while the European Central Bank (ECB) foresees an 8.7% fall in the eurozone.
2
A. A synchronized global crisis.........................1
are expected to shrink by 7% and emerging economies by 1.6% (see figure 1). expansionary policies have induced a slow and uncertain recovery, first in China and later in the United States and the eurozone.
1
Contents
The cut-off date for the information used to prepare this report is 30 June 2020, unless otherwise indicated. For an analysis of the synchronized nature of the present crisis, see World Bank (2020).
E. Four lines of action.................................... 20 Bibliography.................................................... 24
