In its latest Global Economic Prospects report, the World Bank said that advanced economies are expected to shrink 7.0% in 2020, while emerging market economies will contract 2.5%, their first since aggregate data became available in 1960. On a per-capita GDP basis, the global contraction will be the deepest since 1945-46 as World War Two spending dried up.
The updated forecasts show more damage to the economy than estimates released in April by the International Monetary Fund, which predicted a 3.0% global contraction in 2020.
The IMF plans to update its forecasts on June 24 and Managing Director Kristalina Georgieva has said that further cuts are “very likely.”
World Bank officials said their baseline scenario assumes that social distancing lockdowns and temporary business closures begin to ease at the end of June.
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