World economy had the worst decline since at least 1940

The world economy recorded its steepest annual drop in output since statistics on aggregate economic activity were introduced in the early 1940s, with no region spared.

The ILO has estimated that the crisis caused an actual loss of 255 million full-time jobs worldwide.

For its part, UNCTAD projects that last year there was a 3.9% drop in the world economy, as the spread of the coronavirus caused lockdowns across the globe.

While the rebound in the third quarter, when countries began to lift restrictions, was strong and in line with expectations, a second wave of the virus hit earlier than expected in the last quarter of 2020 slowing the recovery, especially in Western Europe.

However, an earlier-than-expected breakthrough with vaccines and better management of lockdown measures have offset the factors in terms of the overall economic impact of Covid-19.

Forecasts made by the Trade and Development Report for 2020 were generally correct, with East Asia and Latin America slightly better than expected, but Europe, India and South Africa worse.

From UNCTAD’s perspective, the positive surprises have been Brazil, Turkey and the United States, where greater than expected relief measures eased the recession and rising commodity and asset prices had a beneficial impact on growth. .

Several African economies also benefited from the rebound in commodity prices, and the region as a whole experienced less than expected pressures on public health systems.

World economy

For UNCTAD, the world economy would probably be affected after a third wave of the pandemic.

Given that world output growth is expected to slow after 2021, particularly in advanced economies, it seems reasonable to assume that unless there is a decided change in policy direction, the world economy will take more than a decade. in catching up on its pre-pandemic trend.

In prospect, the world economy would have a rise of 4.7% in 2021, according to UNCTAD.


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