Coronavirus Pandemic: World in grip of worst recession

The global economy will suffer the biggest peace-time downturn in a century before it emerges next year from a coronavirus-inflicted recession, the OECD said yesterday.

The economy will contract at least six percent this year, with the unprecedented loss of income and "extraordinary uncertainty" caused by measures to contain the outbreak, it said.

In the case of a second wave of contagion later in the year, economic output could shrink by as much as 7.6 percent, it warned. In both scenarios, recovery will be "slow and uncertain".

GDP growth should resume in 2021, by 5.2 percent if the virus is contained, and 2.8 percent if there is another infection wave, the Organisation for Economic Co-operation and Development (OECD) said in its latest outlook, entitled "World Economy on a Tightrope". 

The grim warning from OECD came at a time when Europe's most powerful countries urged the European Union to better prepare for the next pandemic after chaotic responses to the coronavirus and the World Health Organization has told Pakistan it should implement "intermittent" lockdowns to counter a surge in infections.

The OECD warned that by the end of next year, "the loss of income exceeds that of any previous recession over the last 100 years outside wartime, with dire and long-lasting consequences for people, firms and governments."

As unemployment rises, private debt levels in some countries are "uncomfortably high," said the report, "and business failure and bankruptcy risks loom large."

In its previous outlook in March, by when the outbreak had hit China but not yet the world's other large economies, the OECD slashed its global growth forecast by half a percentage point to 2.4 percent, which would have been the worst performance since the 2008 financial crisis.

Things have got considerably worse since then, with commerce and travel shut down as governments scrambled to rein in the pandemic by keeping people at home.

BETTER PANDEMIC PLAN

There should be a "common European approach" to challenges like Covid-19 in future, European leaders including French President Emmanuel Macron and German Chancellor Angela Merkel wrote in a letter and policy paper to the European Union's top official.

Europe has been the hardest-hit continent with nearly 185,000 people killed, and the leaders said a lack of coordination had left nations short of crucial medical equipment when the coronavirus arrived.

Worldwide, Covid-19 deaths have passed 411,000, with more than seven million infections.

The United States recorded 819 deaths in the past 24 hours, bringing its own grisly toll to more than 114,000 out of 2 million cases -- leaving it the country hardest hit by the pandemic in terms of both the number of fatalities and the number of cases.

And the crisis continued to escalate in Latin America, which by late Tuesday had almost 1.4 million cases and nearly 70,000 deaths.

Brazil's health ministry cited figures late Tuesday indicating the death toll had risen by 1,272 to over 38,400 killed by the virus -- the third highest toll in the world after the US and Britain.

Far-right President Jair Bolsonaro's government had stopped publishing the total number of virus deaths on Friday, saying it was adopting new methodology.

However, the government was forced into a U-turn by a Supreme Court ruling on Monday that it must return to the old format, which government critics said is more transparent.

On Tuesday Peru, second only to Brazil as the region's worst-hit country, announced it had passed 200,000 cases of the virus, adding more than 4,000 cases in a single day, reports AFP.

In Nicaragua, at least eight public health doctors were sacked for criticizing the lack of a serious response to the crisis from the government of President Daniel Ortega, an independent medical body said.

LIFE-SAVING LOCKDOWNS

The World Health Organization has warned that complacency is the biggest threat in countries where the pandemic seems to have abated.

Globally, it does not appear to be abating at all: the WHO said a record number of new coronavirus cases were recorded worldwide on Monday, the majority of them in South Asia and the Americas.

Underlining the warning, deaths and infections continue to climb sharply in India even as the government lifted some curbs after a 10-week lockdown.

Authorities in the capital Delhi warned on Tuesday that cases in the city could shoot up almost 20 times to more than 500,000 in the coming weeks.

India's financial capital, Mumbai, recorded 51,000 cases, taking it past the peak in Wuhan, where the virus first emerged.

Since the start of Pakistan's outbreak in March, Prime Minister Imran Khan opposed a nationwide lockdown of the sort seen elsewhere, arguing the impoverished country could not afford it.

Instead, Pakistan's four provinces ordered a patchwork of closures, but last week Khan said most of these restrictions would be lifted.

Health officials yesterday declared a record number of new cases in the past 24 hours. The country has now confirmed a total of more than 113,000 cases and 2,200 deaths -- though with testing still limited, real rates are thought to be much higher.

UN Secretary-General Antonio Guterres warned Tuesday that the world is facing an "impending global food emergency" that could impact hundreds of millions of people as the pandemic threatens already strained supply chains,

"Our food systems are failing, and the Covid-19 pandemic is making things worse," the UN chief said in a statement accompanying a report by the world body.