India & China likely to be exceptions to global Coronavirus-triggered recession: UN

world ecomy will go into recession this year with a predicted loss of trillions of dollars of global income due to coronavirus pandemic, spelling serious trouble for developing countries with likely exception of India and China, according to a latest UN trade report.

With two-thirds of world's population living in developing countries facing unprecedented ecomic dam from COVID-19 crisis, UN is calling for a USD 2.5 trillion rescue pack for se nations.

According to new analysis from United Nations Conference on Trade and Development (UNCTAD), UN trade and development body titled ' COVID-19 Shock to Developing Countries: Towards a 'whatever it takes' programme for two-thirds of world's population being left behind', commodity-rich exporting countries will face a USD 2 trillion to USD 3 trillion drop in investments from overseas in next two years.

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UNCTAD on ecomy

UNCTAD said that in recent days, advanced ecomies and China have put toger massive government packs which, according to Group of 20 leading ecomies (G20), will extend a USD 5 trillion lifeline to ir ecomies.

"This represents an unprecedented response to an unprecedented crisis, which will attenuate extent of shock physically, ecomically and psychologically," it said.

It added that while full details of se stimulus packs are yet to be unpacked, an initial assessment by UNCTAD estimates that y will translate to a USD 1 trillion to USD 2 trillion injection of demand into major G20 ecomies and a two percent point turnaround in global output.

"Even so, world ecomy will go into recession this year with a predicted loss of global income in trillions of dollars. This will spell serious trouble for developing countries, with likely exception of China and possible exception of India," UNCTAD said.

report, however, did t give a detailed explanation as to why and how India and China will be exceptions as world faces a recession and loss in global income that will impact developing countries.

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Furr, given deteriorating global conditions, fiscal and foreign exchange constraints are bound to tighten furr over course of year.

UNCTAD estimates a USD 2 trillion to USD 3 trillion financing gap facing developing countries over next two years.

In face of a looming financial tsunami this year, UNCTAD proposes a four-pronged strategy that could begin to translate expressions of international solidarity into concrete action.

This includes a USD 1 trillion liquidity injection for those being left behind through reallocating existing special drawing rights at International Monetary Fund; a debt jubilee for distressed ecomies under which ar one trillion dollars of debts owed by developing countries should be cancelled this year and a 500 billion dollars Marshall Plan for a health recovery funded from some of missing official development assistance (ODA) long promised but t delivered by development partners.

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speed at which ecomic shockwaves from pandemic has hit developing countries is dramatic, even in comparison to 2008 global financial crisis, UNCTAD said.

" ecomic fallout from shock is ongoing and increasingly difficult to predict, but re are clear indications that things will get much worse for developing ecomies before y get better," UNCTAD Secretary-General Mukhisa Kituyi said.

report shows that in two months since virus began spreading beyond China, developing countries have taken an ermous hit in terms of capital outflows, growing bond spreads, currency depreciations and lost export earnings, including from falling commodity prices and declining tourist revenues.

Lacking monetary, fiscal and administrative capacity to respond to this crisis, consequences of a combined health pandemic and a global recession will be catastrophic for many developing countries and halt ir progress towards Sustainable Development Goals.

Even as advanced ecomies are discovering challenges of dealing with a growing informal workforce, this remains rm for developing countries, amplifying ir difficulties in responding to crisis.

"Advanced ecomies have promised to do 'whatever it takes' to stop ir firms and households from taking a heavy loss of income," said Richard Kozul-Wright, UNCTAD's director of globalisation and development strategies.

He added: "But if G20 leaders are to stick to ir commitment of 'a global response in spirit of solidarity', re must be commensurate action for six billion people living outside core G20 ecomies".

According to reports, death toll from coronavirus pandemic has soared past 35,000 while number of confirmed cases topped 750,000 globally.

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