Η pandemic of coronavirus is set to leave a dark mark on the global economy in the decade ahead, according to World Bank report. According to the report, the onslaught of the coronavirus has caused the worst economic recession since World War II.
It also notes that the upsurge in COVID-19 comes to exacerbate a downward trend, which had already begun to be recorded pre-coronovirus and was in line with the an ageing population and low productivity growth.
It provides that the potential growth rate the global economy - which considers that it operates under conditions of full employment and utilisation of productive capacity - will be reduced to 1.9% per year on average from 2020 to 2029, whereas before the pandemic it was estimated to be 2.1%.
As the World Bank explains, the pandemic may hold down growth in the long term for two reasons:
- Uncertainties and low expectations for growth can discourage companies from new investments.
- The persistence of unemployment and the closure of schools worldwide will lead to a loss of knowledge and skills in the labour market.
The bank stresses, however, that there are measures that can be taken to mitigate or reverse the economic damage caused by the pandemic.
In the measures these include expenditure on infrastructure, the support for women's employment and diversifying the economy so that it is not over-reliant on specific sectors.
