The World Economic Forum released a new GDP growth forecast on April 14th, under which it stated that the global GDP will shrink by 3% in 2020 due to the COVID-19 pandemic. Earlier to the pandemic, the WEF has estimated global growth of 3.3% in 2020. The economy shrink is much worse than the 2008-09 financial crises. In 2009, the global economy shrank by 0.1%.
The Indian origin WEF Chief Economist Gita Gopinath has also said that the projections are taken into the baseline scenario that the pandemic will fade in the second half of 2020. It is also projected that the global economy will grow by 5.8% in 2021 as the economy will be normalized. She also warned that much worse economic outcomes are possible if the virus is not controlled soon.
Developed countries are expected to hit most due to the pandemic. As per WEF, the developed countries‘economy will shrink by 6.1% in 2020. The US economy is expected to register a downfall of 5.9% in 2020. Italy and Spain will be the most affected economies due to the COVID-19 pandemic and will register a downfall of 9.1% and 8.0% respectively in 2020. Only two emerging economies are expected to show a positive growth in 2020 that is India and China. India is expected to grow with a growth of 1.9% in 2020 as compared to 4.2% in 2019. Moreover, China, the source of the virus will show a growth of 1.2% in 2020 as compared to 6.1% in 2019. The WEF has said that effective policies are necessary to pre-empt the worse outcome and to protect lives. There is a need to implement substantial targeted fiscal, monetary, and financial measures in order to support businesses and households. It also recommended strong multilateral cooperation among global players to overcome the pandemic
