“This is a deeply sobering outlook, with the crisis likely to leave long-lasting scars and pose major global challenges,” said Ceyla Pazarbasioglu, vice president for equitable growth, finance and institutions at the World Bank.
“Our first order of business is to address the global health and economic emergency. Beyond that, the global community must unite to find ways to rebuild as robust a recovery as possible to prevent more people from falling into poverty and unemployment.”
Assuming lockdown measures are lifted from the middle of this year, global growth is forecast to rebound to 4.2% in 2021. However, the World Bank warned the risk from a more protracted pandemic, financial market upheaval and firms retreating from global supply chains could trigger an even bigger crash in world GDP this year of about 8%, followed by a sluggish recovery in 2021 of little more than 1%.
Faced with the heightened risk of a prolonged and painful crisis, Ayhan Kose, the World Bank’s prospects group director, said countries and organisations ought to stand ready to deploy further measures to support people and businesses.
“If the past is any guide, there may be further growth downgrades in store,” he said.