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UN estimates losses for the global economy due to coronavirus

US, WASHINGTON (NEWS OBSERVATORY) — Losses of the global economy associated with an outbreak of a disease caused by a coronavirus may reach about $ 2 trillion this year.

Such a forecast is contained in the report of the United Nations Conference on Trade and Development (UNCTAD) published in Geneva on Monday.

According to UNCTAD, global economic growth, which, according to the World Bank forecast in January, was expected to reach 2.7% in 2020, will be about 1.7% due to the negative impact of coronavirus.

“According to a preliminary negative scenario, the decline in global income will reach $ 2 trillion, while developing countries (with the exception of China) will suffer losses of $ 220 billion,” the authors of the report indicate.

According to them, “under this scenario, oil exporting states, but also commodity exporters that lose more than one percentage point of growth, as well as countries with strong ties to economies that have suffered initial shocks, will be particularly affected.”

It is emphasized that “the spread of coronavirus is primarily an emergency problem for public health, but it also poses a significant threat to the economy.” UNCTAD expects an annual growth rate of 4.9% in China in 2020 instead of 6.0%, which was forecast as of January, in the US – 1.2% instead of 2.0%.

According to experts, the European Union, Canada and Mexico are missing due to the coronavirus from 0.9 to 0.7 percentage points of the expected growth.

As Richard Kozul-Wright, director of the UNCTAD Globalization and Development Strategies Division, stated at a press conference in Geneva, experts back in September last year, before the coronavirus epidemic, expressed concern about the state of the global economy, given the problem that had not been resolved since the 2008 crisis.”

“We are shocked by the lack of serious regulation of the financial system. As a consequence of the 2008-2009 crisis, we expected to see much more active regulation of speculative capital flows,” the expert said.

“But this has not happened. And until this is done, repeated shocks that cause concern in the economy and leading to a slowdown, will happen again and again.”

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Article is written and prepared by our foreign editors from different countries around the world – material edited and published by News Observatory staff in our US newsroom.

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