The global economy is likely to shrink 6% in 2020 as a result of the coronavirus pandemic, the largest recession outside of wartime in 100 years, but the hit could be even higher if the coronavirus does not remain under control, warns the Organisation for Economic Co-operation and Development (OECD).
In its updated Economic Outlook it warned the uncertainty of when a vaccine might be available and the effectiveness of tracking, tracing and testing, means there are two equally likely scenarios for global growth.
If the virus remains under control, a sharp 6% fall in 2020 could be followed by 5.2% growth next year, but a second outbreak would see the global economy shrink by 7.6%, with a much slower 2.8% growth in 2021.
Both scenarios were described as “sobering”, leaving “long-lasting scars of high unemployment and weak investment”. Policymakers were also warned that “extraordinary policies” would be required to “walk the tightrope towards recovery.”