The COVID-19 pandemic is a global health crisis without precedent in living memory. It has triggered the most severe economic recession in nearly a century and is causing enormous damage to people’s health, jobs and well-being.The lockdown measures brought in by most governments have succeeded in slowing the spread of the virus and in reducing the death toll but they have also frozen, and sometimes destroyed, business activity in many sectors, widened inequality, disrupted education and undermined confidence in the future. The low-paid, low-skilled and the young have been particularly badly hit - by their exposure to the virus and by job losses.As restrictions begin to be eased, the path to economic recovery remains highly uncertain and vulnerable to a second wave of infections. With no near term prospect of a vaccine becoming available, two scenarios are equally likely. With or without a second outbreak, the consequences will be severe and long-lasting.
A renewed outbreak of infections triggers a return to lock-downs.
World economic output plummets 7.7% this year, before climbing back 2.7% in 2021.
The unemployment rate nearly doubles worldwide to 10.2 % with little recovery in jobs next year.
Global economic activity falls 6% in 2020 and unemployment climbs to 9.4 % from 5.4 % last year.
Living standards fall less sharply than with a second wave but people’s income still drops on average to its lowest level in five years by 2021.
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Many countries have introduced support measures to protect jobs in the near-term in hard-hit sectors, but young workers in particular are vulnerable.
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The global economy is now experiencing the deepest recession since the Great Depression in the 1930s, with GDP declines of more than 20% and a surge in unemployment in many countries. Even in countries where containment measures have been relatively light, early data are already making clear that the economic and social costs of the pandemic will be large. Growth prospects depend on many factors, including how COVID-19 evolves, the duration of any shutdowns, the impact on activity, and the implementation of fiscal and monetary policy support. Uncertainty will likely prevail for an extended period. Given this uncertainty, two scenarios have been developed to reflect the possible evolution of the global economy. In the double-hit scenario, it is assumed that renewed shutdowns are implemented before end of 2020, following another surge of the COVID-19 virus.
Explore new country notes web-book on OECD digital iLibraryExtract of the report 10 june 2020 The spread of Covid-19 has shaken people’s lives around the globe in an extraordinary way, threatening health, disrupting economic activity, and hurting wellbeing and jobs. Since our last Economic Outlook update, in early March, multiple virus outbreaks evolved into a global pandemic, moving too fast across the globe for most healthcare systems to cope with effectively. To reduce the spread of the virus and buy time to strengthen healthcare systems, governments had to shut down large segments of economic activity. At the time of writing, the pandemic has started to recede in many countries, and activity has begun to pick up. The health, social and economic impact of the outbreak could have been considerably worse without the dedication of healthcare and other essential workers who continued to serve the public, putting their own health at risk in doing so.
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