World Bank Estimates 2020 Global Output Shrinks 5.2%

The World Bank’s released the latest Global Economic Prospects report, which estimates the world economy will contract 5.2% for the year, warning that this forecast could increase if uncertainty over the pandemic and business lockdown continues.

The report stated that advanced economies are expected to suffer the biggest loss, projected at 7% in 2020. In comparison, emerging markets are expected to contract at a much smaller 2.5%.

This worldwide loss has not occurred at this level for nearly 80 years, the last time being the 1945-46 World War II global recession.

The report also projects a downside scenario wherein economies remain in lockdown for another 3 months, estimating advanced economies shrinking by 10% and growing economies by 5%. This forecast also included an estimate of 70 to 100 million people being pushed back into extreme poverty because of the pandemic.