The World Bank on Monday said that the world will see a major downfall in future with the present health and economic condition. It will be the largest shock globally ever since the 1940s. The poverty rate will increase hugely and millions of people will face extreme poverty.
The World Bank indicates the latest update from “Global Economic Prospects” where it shows that global economic activity will reduce by 5.2% this year. The worst depression since the decades was 13.8% at the end of world war II.
The future economic downturn that is estimated for this year is the lowest over the past 150 years. The Great depression was noted during World War I and II as many countries were collapsed, affected with damage caused by wars. The countries like the United States and others were well built with defensive measures but demobilized.
After the world bank economists analyzed the economic downfall, they are estimating the poverty will affect 70 to 100 million people this year.
The estimation is of a 5.2 decline in global output which is equal to 7.7 percentage. This is an unparalleled estimation as per World Bank’s January economic study. The World Bank expected 2.5% growth this year before the pandemic.
The World Bank forecasts the GDP fall of the US this year which would be 7% and may see 3.9% next year. Coming to China, the economy will barely reduce by 1% and rebound by 6.9% in 2021.
Economists estimate the economic rate of the countries who are using euros. There are 19 European countries using euros and there will be a drop of 9.1%. It is likely to increase with 4% next year.
The economic forecast by the World Bank was based on an assumption of a coronavirus outbreak. As the countries are lifting up the restrictions in phases, the economies would pick up soon after lives back to normal.
In case of a second wave of the pandemic that disrupts economic activity then the growth will reduce even more this year. Eventually that would be highly difficult to rebuild the next year according to the World Bank economy global studies.
