Impact of Covid-19 on Global Economy

United Nations Conference on Trade and Development (UNCTAD) has observed that the economic uncertainty sparked by the Covid-19 will likely cost the global economy $1 trillion in 2020. A slowdown in the global economy to under 2% for this year is envisaged which will probably cost in the order of $1 trillion. The observation is based on the World Economic Situation and Prospects 2020 released by UNCTAD.

Daily Current Affairs Quiz 2020

If the world economy grew at only 0.5% which would involve a $2 trillion hit to gross domestic product (GDP). With moderate declines in private consumption, investment and exports and offsetting increases in government spending, global growth would fall to 1.2% in 2020. Global financial market is fluctuating due to the supply-chain interruptions from China and oil price uncertainty among major producers. Governments need to spend now in order to prevent more damaging meltdown in the coming times. Chinese Government is likely to introduce significant expansionary measures – shorthand for increasing spending or tax cuts. The US government is in an election year and it needs to do more than simply cutting taxes and reducing interest rates.