Supply-side shock to be transformed to wider demand-side shock over pandemic: UN Department of Economic and Social Affairs
The global economy could shrink 0.9% this year due to the coronavirus pandemic, the UN Department of Economic and Social Affairs (UN DESA) said on Wednesday.
The world output could contract further if imposed restrictions on economic activities extend to the third quarter, and fiscal responses fail to support income and consumer spending, the UN body said.
Pointing to revenue loss, which will result in a higher unemployment rate, the report said a supply-side shock will be transformed into a wider demand-side shock for the economy.
The UN DESA suggested that a well-designed fiscal stimulus package, prioritizing health spending to contain the spread of the virus, and providing income support to households most affected by the pandemic would help minimize the likelihood of a deep economic recession.
“Urgent and bold policy measures are needed, not only to contain the pandemic and save lives, but also to protect the most vulnerable in our societies from economic ruin and to sustain economic growth and financial stability,” said UN DESA’s Under-Secretary-General Liu Zhenmin.
After originating in Wuhan, China last December, COVID-19, the disease caused by the virus, has spread to at least 180 countries and regions across the world, with its epicenter shifting to Europe.
The virus has killed more than 44,150 people and infected over 883,200 globally, while recoveries from the disease exceed 185,300, according to figures compiled by U.S.-based Johns Hopkins University.