UN forecasts pandemic to shrink world economy by 3.2 percent

The United Nations is forecasting that the coronavirus pandemic will shrink the world economy by 3.2 percent this year, the sharpest contraction since the Great Depression in the 1930s.

The U.N.’s mid-year report released Wednesday said COVID-19 is expected to slash global economic output by nearly $8.5 trillion over the next two years, wiping out nearly all gains of the last four years.

In January, the U.N. forecast a modest growth of 2.5 percent in 2020.

The United Nations World Economic Situation and Prospects report said the pandemic is also “exacerbating poverty and inequality,” with an estimated 34.3 million people likely to fall below the extreme poverty line in 2020 — 56 percent of them in Africa.

It said an additional 130 million people may join the ranks of people living in extreme poverty by 2030, dealing a “huge blow” to global efforts to eradicate extreme poverty and hunger by the end of the decade.

(image credit: AP)