The Organization for Economic Development and Cooperation (OECD) stated on Wednesday that the contraction in the global economy would be at least 6% and the recovery would be slow and uncertain. Coronavirus pandemic has twisted the entire globe towards a major economic downturn and the economy is already facing a huge tumble.
OECD also said that if there is a second wave of the contagion, then the economy could shrink as much as 7.6% in 2020 followed by GDP growth of 5.2% if the contagion is contained before the second wave and 2.8% if there is a second wave of the infection.
GLOBAL ECONOMY IMPACT
OECD alerted the global countries that by the end of 2021 the loss of income will exceed any previous recession over the last 100 years outside wartime, with dire and long lasting ramifications to the people firms and governments.
Private debts are booming in many parts and this will lead to a large number of failure in the operations which will eventually end in bankruptcy.
Previously, in March when the outbreak had hit only China and no other large economies of the world, OECD had slashed the growth of the country half to 2.4% which would have the worst to the country since the 2008 recession.
This economic downturn could largely affect countries like France, the United Kingdom, and Italy to a larger extent this year.
OECD also projected the unemployment rate in the globe and stated it to be the highest level in the past twenty-five years, and recovery can begin only in late 2021 at a slower pace
OECD said that the global cooperation to control the virus with a treatment and a potential vaccine and a broader resumption of multilateral dialogue will be the key for unlocking economic momentum.
Until a potential vaccine is developed and people are provided with it, social distancing to prevent the spread, testing the people who could contract the virus, and isolating those infected are the key parameters to minimize the spread.
But these measures can largely affect the sectors that require close personal contact such as entertainment, tourism, restaurant, accommodation, and travel even if the lockdown is lifted.
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