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The World Bank expects a major global recession due to the coronavirus pandemic (COVID-19)
Washington:
Expecting a major global recession due to the coronavirus pandemic, the World Bank said Friday that its estimates suggest a much deeper economic recession than the 2007-09 Great Recession. World Bank President David Malpass said that while the tragic impacts of the COVID-19 pandemic are being felt globally, this crisis is likely to affect the poorest and most vulnerable countries, and the hardest people.
The countries of the International Development Association (IDA), which are home to two thirds of the world’s extreme poor, will be seriously affected, Malpass said in his speech to the Development Committee during the annual spring meeting of the International Monetary Fund and the World Bank. . Part of the World Bank, the International Development Association helps the world’s poorest countries.
“Beyond the health impacts of the COVID-19 pandemic, we expect a major global recession. Our estimates suggest a much deeper global recession than the Great Recession, given declining production, investment, employment and trade, “said Malpass.
Since it emerged in China late last year, the coronavirus pandemic has upset the world, forcing half of humanity inside and paralyzing the global economy.
Taking swift and broad-based steps to address the challenge, he said the World Bank has so far financed COVID-19 programs in 64 developing countries and will have 100 countries up and running by the end of April.
The bank can provide $ 160 billion of financing in the next 15 months and IDA will provide $ 50 billion of that total in terms of highly favorable grants and credits, he said.
Mr. Malpass said that the program is based on three pillars: protecting the poorest and most vulnerable households; supporting businesses and saving jobs, that the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) are working with private sector clients to support trade and working capital lines; and help developing countries implement emergency health operations and strengthen economic resilience.
Noting that debt relief is a powerful and fast-acting measure that can bring real benefits to people in poor countries, Mr. Malpass said that it is important that beneficiary countries use the additional resources to respond to COVID- 19 and fully disclose its public sector. financial commitments
The World Bank and IMF are being asked to monitor their disclosures and the use of the fiscal space created by debt relief, he said.
Mr. Malpass warned that if the international community does not move quickly to strengthen systems and resilience, the development gains of recent years can easily be lost.
