Global economy to shrink by 3.2 percent

The world economy is projected to shrink by 3.2 percent wiping out nearly four years of output gains as economic activities around the world come to a grinding halt due to the coronavirus (COVID-19) pandemic, according to a new UN report.

The world will see about 8.5 trillion US dollars in overall losses as per the mid-year economic analysis by the UN.

In its World Economic Situation and Prospect (WESP) report update released Wednesday, the UN Department of Economic and Social Affairs (DESA) said as of mid-2020, GDP in developed countries will plunge to -5.0 percent and the output of developing countries will shrink by 0.7 percent.

“The global economic outlook has changed drastically since the launch of WESP 2020 in January,” noted Elliott Harris, the UN Chief Economist and Assistant Secretary-General for Economic Development, reports UN news.

Coronavirus has unleashed a health and economic crisis, unprecedented in scope and magnitude, with lockdowns and border closures paralysing economic activity and laying off millions of workers globally.

Harris said with large-scale restrictions of economic activities and heightened uncertainties, the global economy has come to a virtual standstill in the second quarter of 2020.