United Nation, March 31: As per the latest UN trade report, the world economy will go into recession this year due to the coronavirus (COVID-19) pandemic, spelling serious trouble for developing countries with the likely exception of India and China. Two-thirds of the world’s population living in developing countries facing economic damage from the coronavirus crisis.
According to the United Nations Conference on Trade and Development (UNCTAD), the UN trade and development body titled ‘The COVID-19 Shock to Developing Countries: Towards a ‘whatever it takes’ programme for the two-thirds of the world’s population being left behind’, commodity-rich exporting countries will face a drop in investments upto USD 3 trillion from overseas in the next two years.
The UNCTAD said that in recent days, advanced economies and China have put massive packages which, according to the Group of 20 leading economies (G20), will extend a USD 5 trillion lifeline to their economies.
“This represents an unprecedented response to an unprecedented crisis, which will attenuate the extent of the shock physically, economically and psychologically,” the UNCTAD said.
However, the full details of these stimulus packages are yet to be unpacked.
An initial assessment by the UNCTAD estimates that they will translate to a USD 1 trillion to USD 2 trillion injection of demand into the major G20 economies and a two percentage point turnaround in global output.
The report, however, did not give a detailed explanation as to why and how India and China will be the exceptions as the world faces a recession and loss in global income that will impact developing countries.