Even without a second wave of infections, the economic pain from the coronavirus pandemic is far from over, doing most harm to the young and the poor.
The coronavirus crisis has triggered the worst global recession in nearly a century.
Hundreds of millions of people worldwide have lost their jobs, and the crisis is doing most harm to the young and the poor, making inequalities worse, the Organization for Economic Co-operation and Development (OECD) said in its latest analysis of global economic data.
“It is probably the most uncertain and dramatic outlook since the creation of the OECD,” Secretary General Angel Gurria said in a statement. “We cannot make projections as we normally do.”
In the best-case scenario, or rather, one in which there is no second wave of infections, the OECD forecasts a fall in global GDP of 6% this year and a rise of 2.8% next year. A brutal second wave, however, could see the global economy shrink by 7.6%, the agency warned.
The outlook for Canada is even worse than the estimated global impact with a predicted decline of at least 8% this year, followed by a bounceback of 3.9%. But a second wave could cause the decrease in GDP this year to be as high as 9.4%. Global stock markets dropped after the release of the report, which is more downbeat than other forecasts from the likes of the World Bank. Gurria argued that “presenting the problem as the choice between lives and livelihoods, meaning a choice between health and the economy, is a false dilemma. If the pandemic is not brought under control, there will be no robust economic recovery.”
In case of a second wave of infections, the OECD forecasts that the average unemployment rate across the 37 developed countries among its members would double this year to 10% with “little recovery” likely in 2021. Even in a more optimistic scenario, the figure would be 9.2%. In poorer countries, expectations are even lower, and informal workers are especially vulnerable. The agency urged governments to tackle inequalities by investing in healthcare systems, co-operating with global partners on medical supplies, vaccine and treatments, and retraining people in sectors of the economy hit hardest.
The virus has infected 7.2 million people worldwide and killed at least 411,000, according to official figures tallied by Johns Hopkins University, though the true toll is estimated to be even higher.