OECD predicts global economy will shrink by 6% in case second wave of COVID-19 is avoided

The coronavirus lockdown has taken a massive toll on the global economy after it forced the government to shut down businesses in order to prevent the disease from spreading. The Organisation for Economic Co-operation and Development (OECD) on June 10 released a report where it said that global economic activity will fall by at least 6 percent in 2020 if the second wave of coronavirus outbreak is avoided. OECD released two equally probable scenarios – one in which the second wave of infections, with renewed lock-downs, hits before the end of 2020, and one in which another major outbreak is avoided.

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According to the report titled 'World Economy on a Tightrope' if the second wave of outbreak hits the world forcing governments to impose another lockdown, world economic output will plummet 7.6% this year, before climbing back 2.8% in 2021. OECD forecasted unemployment rate to nearly double to 10% with little recovery in jobs by 2021 if the second wave cannot be avoided. However, if the scenario is the other way around, the unemployment rate will climb to 9.2% from 5.4% in 2019. 

Read: Powell Likely To Stress Fed’s Ability To Further Aid Economy

World Bank report

The World Bank on June 8 in its latest Global Economic Prospects report forecasted that the global GDP in 2020 will shrink by 5.2 percent calling it the worst recession since World War II. According to the World Bank forecast, the advanced economies will contract by 7 percent, while the emerging and developing will record a 2.5 percent decline. According to the report, per capita incomes are estimated to fall by 3.6 percent due to the COVID-19 recession, pushing millions into extreme poverty. 

Read: Japan Still In Recession, But Economy Shrank At Lower Rate

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