A report issued by the United Nations Conference on Trade and Development (UNCTAD) showed that even if a stronger than expected recovery occurs during the current year, the global economy will lose about $10 trillion of GDP as a result of the emerging coronavirus pandemic and the lockdown measures to combat the virus.
According to the report, despite the possibility of global economic growth during the current year at a rate of 4.7 percent, the gross domestic product will remain about 10 trillion dollars less than it would have been if the pandemic did not occur, which is equivalent to about twice the GDP of Japan, the third largest economy in the world.
The global economy recorded its biggest contraction during the last year since the start of recording data on global economic activity in the early forties of the last century, according to the report. UNCTAD warned that while rich countries have taken massive financial measures to stimulate their economies, as the United States has done recently by approving a stimulus package worth $1.9 trillion, and while the Chinese economy has returned to growth late last year, the smaller and poorer countries are struggling in the face of pandemic repercussions.
UNCTAD bore the developing countries the largest part of the burden of the global economic downturn due to their limited financial capabilities, tightening balance of payments restrictions and ineffective international support for them, which led to one of the largest declines in per capita income relative to GDP.
According to UNCTAD, even a small decline in economic activity could be catastrophic, indicating that the repercussions resulting from imposing restrictions to contain the pandemic were severe, as expected in developing economies such as the Philippines and Malaysia.
UNCTAD raised its forecast for the growth of the global economy during the current year from 4.3 percent to 4.7 percent, indicating the possibility of a stronger recovery in the United States.
Source (Asharq Al-Awsat Newspaper, Edited)
