Momentum for greater climate action sustained under the COVID-19 crisis
Due to the COVID-19 pandemic crisis, the 26th Conference of the Parties (COP26) to the United Nations Framework Convention on Climate Change (UNFCCC) has been postponed from November 2020 to November 2021. Despite this postponement of the supreme decision-making body of the UNFCCC, the momentum for much greater climate action and ambition continues. Recently the European Union (EU), Japan and the Republic of Korea, along with more than 110 other countries, have pledged to achieve carbon neutrality by 2050, while China was set to join them by 2060. By now, 50 per cent of the world?s gross domestic product (GDP) and half…
World Economic Situation And Prospects: December 2020 Briefing, No. 144
The European Central Bank?s unconventional policies?is hyperinflation looming?
Monetary policy across the world has entered ever more uncharted territory over the past years. Gone are the times when changes in policy interest rates were the sole policy variable of public and financial market attention. Today, central bank announcements are as much or even more about unconventional policy tools?such as asset purchase programmes?than they are about interest rates. The European Central Bank (ECB) is no exception in this regard. In reaction to the COVID-19 crisis, it has initiated massive asset purchases, which come on top of similar such programmes over the past years and besides significant…
World Economic Situation And Prospects: November 2020 Briefing, No. 143
Public finances after COVID-19: is a high-debt, low-growth trap looming for developing countries?
The COVID-19 pandemic has triggered unprecedented policy responses around the world. Governments of developed and developing countries have taken extraordinary steps to halt the spread of the virus and limit the economic and social fallout from the crisis. In the face of rapidly declining private sector demand, public support in the form of monetary and fiscal stimulus has been vital to avert economic collapse. However, the massive interventions have left governments with record debt burdens and major fiscal challenges going forward.
The situation is especially precarious among developing…
World Economic Situation And Prospects: October 2020 Briefing, No. 142
The collapse of global trade and implications for developing regions
Global trade in goods and services tumbled in 2020
International trade sputtered to a halt in the first half of 2020, as the novel coronavirus pandemic prompted widespread lockdowns, curtailed factory output, disrupted transportation and depressed demand. Global merchandise trade shrank by 3 per cent year-on-year in the first quarter of 2020, according to the World Trade Organization (WTO) (figure 1). Compared with the preceding quarter, trade volume shrank by 2 per cent in seasonally adjusted terms. Global services exports fell harder, by 7.6 per cent year-on-year in the same period and contracted by 7.3 per cent compared…
World Economic Situation And Prospects: September 2020 Briefing, No. 141
Varying impact of the COVID-19 pandemic on the labour markets of developed countries
The outbreak of the COVID-19 pandemic and the resulting severe restrictions on economic and social activities had a profoundly disruptive impact on labour markets in virtually every part of the world, including in the OECD countries?the group mostly characterised by high-income, industrially-advanced and diversified economies, which includes, among others, the United States, CANZ group of countries, most of the European Union (EU) and Japan. The aggregate OECD unemployment rate stood at 5.2 per cent in February 2020, as several OECD member states entered 2020 with historically low unemployment figures, but…
World Economic Situation And Prospects: August 2020 Briefing, No. 140
Diverging inflation rates suggest new risks
Global inflation trends
While an increasing number of countries are reopening their economies during the COVID-19 pandemic, the prospects of the world economy remain highly uncertain. One of the many uncertainties that the world economy is facing is the prospect of consumer prices.
Before the COVID-19 pandemic hit the world economy, the global average trend pointed to a historically low level of consumer inflation (figure 1). The converging unweighted and GDP-weighted world average inflation rates implies the trend was observed not only in high-income countries. Several factors contributed to this trend. First, the supply capacity for consumers…
World Economic Situation And Prospects: July 2020 Briefing, No. 139
The pandemic hits emerging economies
Emerging economies are facing an unprecedented health and economic crisis. The synchronous collapse in global demand and the widespread disruptions in supply chains are inflicting severe economic pain through trade, financial and commodity prices channels. To contain the pandemic, emerging economies have imposed, to varying degrees, lockdowns and social distancing measures, further disrupting economic activity. India, Indonesia, Mexico, Nigeria, the Russian Federation and South Africa have implemented full or partial lockdowns. But even as countries have followed different approaches to contain the COVID-19 pandemic, enforcement has in many cases been…
World Economic Situation And Prospects: June 2020 Briefing, No. 138
Against the backdrop of a raging and devastating pandemic, the world economy is projected to shrink by 3.2 per cent in 2020. Under the baseline scenario, GDP growth in developed countries will plunge to ?5.0 per cent in 2020, while output of developing countries will shrink by 0.7 per cent. The projected cumulative output losses during 2020 and 2021?nearly $8.5 trillion?will wipe out nearly all output gains of the previous four years. The pandemic has unleashed a health and economic crisis unprecedented in scope and magnitude. Lockdowns and the closing of national borders enforced by governments have paralyzed economic activities across the board, laying off millions of workers worldwide.…
World Economic Situation and Prospects as of mid-2020
The pandemic crisis will worsen global inequality
The COVID-19 pandemic is wreaking havoc on the global eco??nomy, unleashing the worst economic downturn since the Great Depression. Since the April 2020 Monthly Briefing on the World Economic Situation and Prospects, the global death toll of the pandemic has increased by more than 330 per cent, while the number of confirmed cases rose by over 210 per cent. COVID-19 is now the most severe health crisis since the Spanish Flu of 1918. The epicenter of the pandemic shifted from Europe to the United States during the past month, with the latter now accounting for nearly one third of confirmed cases and a quarter of the death toll globally. The…
World Economic Situation And Prospects: May 2020 Briefing, No. 137
COVID-19: Disrupting lives, economies and societies
A raging pandemic?unleashed by a highly contagious COVID-19 virus?has triggered unprecedented restrictions not only on the movement of people but also on a range of economic activities, and the declaration of national emergencies in most countries in Europe and North America. Growing demand for urgent healthcare and rising death tolls are straining national healthcare systems. The pandemic is disrupting global supply chains and international trade. With nearly 100 countries closing national borders during the past month, the movement of people and tourism flows have come to a screeching halt. Millions of workers in these countries are…
World Economic Situation And Prospects: April 2020 Briefing, No. 136
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