World Bank predicts worst recession in 80 years amid coronavirus – by Eric Martin (Bloomberg News – June 8, 2020)

https://business.financialpost.com/

The global economy will contract the most since World War II this year due to the COVID-19 pandemic, reducing incomes and sending millions of people into poverty in emerging and developing nations, the World Bank said.

Global gross domestic product will probably shrink 5.2 per cent in 2020, the Washington-based development organization said in its semi-annual Global Economic Prospects report Monday.

That compares with a January projection for a 2.5 per cent expansion and would be the fourth-deepest recession of the past 150 years after 1914, 1930-32 and 1945-46, the World Bank said. Per-capita output will contract in more than 90 per cent of countries, the biggest share since 1870. The economy will rebound in 2021, growing 4.2 per cent, it said.

“This is the first recession since 1870 triggered solely by a pandemic, and it continues to manifest itself,” Ceyla Pazarbazioglu, the World Bank’s vice president of equitable growth, finance and institutions, told reporters by phone.

“Given this uncertainty, further downgrades to the outlook are very likely.” The decline in per-capita income may push 70 million to 100 million people into extreme poverty, she said.

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