The swift onset of Coronavirus and the following lockdown measures have plunged the global economy into a severe contraction which has not been seen since World War II, said the World Bank.
In their June 2020 Global Economic Prospects report, the bank expects global economies to shrink by up to 5.2% within the year as domestic demand and supply, trade, and finance have been severely disrupted.
Advance economies are anticipated to shrink 7% while emerging markets and developing economies are expected to shrink by 2.5% this year.
Millions of people will tip into extreme poverty as per capital incomes decline by 3.6% this year.
The deep recession is likely to do long-term damage to investment, cause high unemployment and break global trade and supply linkages.
South Asia regional outlook
In the South Asia region, growth in Afghanistan is expected to slow markedly to 1% in 2020 – the slowest pace in at least 25 years.
Domestic pandemic mitigation measures have heavily affected short-term economic activities. This has been compounded by the deterioration of the advanced and major emerging economies as exports have slowed down.
The gross domestic product (GDP) in Afghanistan is projected to contract by 5.5% in 2020 with key labour-intensive export sectors to recover very slowly.
Any progress next year, is heavily dependent on the pace and timing of Coronavirus recovery and the assumption that the pandemic recedes in a way where countries can lift their lockdown measures before the middle of 2020.
The rapid spread of COVID-19 will also trigger long-lasting rise in poverty and food insecurity.