WASHINGTON - The global economy will enter the worst recession since World War II with a 5.2% contraction this year due to the coronavirus (COVID-19) pandemic, the World Bank writes in its June 2020 Global Economic Prospects.
According to the report, economic activities in developed countries will likely shrink by 7% this year as domestic demand and supply, trade, and finance have taken a blow from the pandemic, while those in developing countries are predicted to drop by 2.5%.
Moreover, per capita incomes are projected to plunge by 3.6%, bringing millions into extreme poverty.
“The blow is hitting hardest in countries where the pandemic has been the most severe and where there is heavy reliance on global trade, tourism, commodity exports, and external financing,” the World Bank wrote in an official statement received by IDNFinancials.com, Monday (8/6).
While the extent of disruption will vary from region to region, the World Bank added, all developing countries are vulnerable to external shocks. In addition, interruptions in education and healthcare are predicted to have lasting impacts on human capital development. (MS)