COVID-19 has taken a terrible human toll and brought our globalised economy to a near standstill. The OECD estimates a loss of 2 percentage points in this year’s GDP growth, per every month of confinement. The pandemic became an economic crisis and will have long-lasting impacts in our labour markets, and in our social fabric.
The OECD estimates the impact of the crisis at a loss of 2 percent per month of confinement in annual GDP growth in 2020. Many economies are heading into deep recession.
2020 IMF and World Bank Spring Meetings: Written Statement to the Development Committee
This crisis comes against the backdrop of strained global trade, stagnating global growth, protracted conflict and climate-related crises – not to mention the constrained fiscal space and existing challenges in the health and social structures in many countries.
2020 IMF and World Bank Spring Meetings: Written Statement to the IMFC.
The call for a coordinated, sizeable, well-targeted collective response to the crisis is being operationalised in the G20 Action Plan, a living document that we are endorsing today. The OECD is proud to have contributed to its development under Saudi leadership.
The socio-economic repercussions of the current crisis will largely exceed what we saw in 2008 and 2009. Border and business closures bring service and industrial sub-sectors to a halt or into supply chain difficulties. In most economies, the sectors most directly affected account for 30 to 40 percent of total output.
G20 Leaders convened last week to make a strong and urgent call for increased cooperation to address the unprecedented challenge of COVID-19. We estimate the loss in annual GDP growth in 2020 at 2 ppt. per month of confinement. Many economies are heading into recession.
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The coronavirus pandemic is causing large-scale loss of life and severe human suffering. It is a public health crisis without precedent in living memory, which is testing our collective capacity to respond.
Over one-third of people in OECD countries are financially insecure. This means that they would be at risk of falling into poverty if they had to forgo three months of their income. Add to this the 12% of people in OECD countries already living in relative income poverty, and you have nearly half the population living precariously.