Monthly Briefing on the World Economic Situation and Prospects

The world registered a record reduction of energy-related CO2 emissions in the first half of 2020. However, this year?s reduction is projected to be a one-time dip, and only has an infinitesimal impact on the buildup of atmospheric CO2

The drastic policy measures by the European Central Bank (ECB) over the past years, notably its asset purchase programmes, have led to fears of money flooding the economy and that this will ultimately result in run-away inflation further down the line.

The COVID-19 pandemic has created a perfect storm for public finances in developing countries by undermining economic activity and affecting both the revenue and expenditure sides of the budget.

The COVID-19 pandemic has compressed global trade by magnitudes last seen during the 2008 global financial crisis. Trade has dropped sharply in developing countries, though with differences between regions.

The short-term impact of the pandemic on employment should be differentiated from its longer-term consequences, involving inter-sectoral changes in labour demand and further acceleration of robotization and automation, necessitating active labour market policies.

On average, weighted by the size of economies, the world economy points to a steep disinflation. However, inflation rates are diverging among countries. In the majority of countries, the price level has increased since the onset of the COVID-19 pandemic.

Millions of people are either losing their jobs or going through significant reductions of their income or working hours. This impact is unevenly distributed along education, gender, age and immigration divides.

Robust and coordinated development cooperation will remain critical to ensure that developing countries can weather the storm and accelerate sustainable development of their economies

Urgent and bold policy measures are needed, not only to contain the pandemic and save lives, but also to protect the most vulnerable in our societies.