Economists have published new interim estimates of financial losses caused by the pandemic. In fact, the global economy has been already severely hit by the coronavirus. However, analysts suppose that it is not the limit. The world is expected to suffer the consequences of the virus-driven crisis for many years.
Laurence Boone, Chief Economist for the Organization for Economic Co-operation and Development (OECD), supposes that in the best-case scenario, the global economy will lose $7 trillion by the end of the next year. The recent advance is likely to be short-lived and the economic recovery could go on for many more years.
Moreover, there are concerns that some countries may suddenly stop providing budget support. Joachim Fels, a global chief adviser at Pacific Investment Management Co. (PIMCO), has also come to such a conclusion foreseeing a new slump in the near future. The vaccine is still in development and it will normally take several years to carry out the vaccination. Thus, the world will hardly avoid the second coronavirus wave. According to experts at the OECD, in the best-case scenario, the global GDP will shrink by 4.5% in 2020.
Notably, the world’s largest economies are likely to go on providing and expanding financial aid. However, such a policy boosts the national debts of these countries. Some of them have already reached record highs for the first time since the Second World War. Among advanced economies, debt rose to 128% of global gross domestic product as of July.
