World Bank predicts 5.2% drop in global GDP in 2020

<p> MINSK, Jun 9 - PrimePress. The World Bank (WB) predicts a 5.2% decrease in global gross domestic product (GDP) in 2020 after a 2.4% increase in 2019. The decline in Belarus’ GDP in 2020 was affirmed at 4%, reads in the WB’s June report published on June 8. </p> <p>   </p> <p> WB experts predict a decline of the Eurozone GDP in 2020 by 9.1%, the United States by 6.1%, Japan by 6.1%, Russia by 6%, and Poland by 4.2%. The economy of China in 2020 will only grow by 1%. </p> <p>   </p> <p> Many pandemic restrictions imposed by most countries have led to significant reductions in consumption and investment, as well as limited labor supply and shrank output. The closure of borders also disrupted the operation of financial and commodity markets, world trade, global production chains, tourism and the transport sector. </p> <p>   </p> <p> Many countries have embarked on large-scale macroeconomic support for domestic economies and the population through fiscal policy measures, which allowed them to stabilize financial markets and to count on the restoration of growth dynamics in 2021 </p> <p>   </p> <p> According to the WB forecast, global GDP growth in 2021 will reach 4.2%: the Chinese economy by 6.9%, the Eurozone by 4.5%, the US by 4%, Poland by 2.8%, Russia by 2.7%, Japan by 2.5%, and Belarus by 1%. </p> <p>   </p> <p> The WB included in its June global economic outlook survey a forecast for development of the Belarusian economy published in April, in which, by the end of 2020, Belarus’ GDP is projected to decrease by 4%, inflation at 11.4%, current account deficit at 5.7% of GDP, and public debt at 59.2% of GDP. </p> <p>   </p> <p> “It is expected that in 2020, the economy will shrink by 4%, because the global economic downturn due to COVID-19 reduces demand for Belarus’ exports of investment goods to the European Union, Russia and other countries. Even if oil supplies from Russia resume, lower oil prices will sharply reduce foreign trade revenues, since customs duties on oil trade will be insignificant this year (compared with 1.1% of GDP in 2019), while Belarus will lose about 1.2% of GDP in recalculated revenues. Export and tax revenues may be reduced even more, if there are delays in signing long-term contracts for potash fertilizers. Repayment of a large debt to Russia for the construction of the nuclear power plant will put additional pressure on public finances,” reads the review. </p> <p>   </p> <p> WB experts assess the medium-term growth prospects of the Belarusian economy as weak, even taking into account expected global growth, restoration of oil prices and the resumption of Russian oil supplies. Therefore, in the short term, the main task of the authorities will be to ensure the adaptation of the economy to the deterioration of the external environment. At the same time, due to limited fiscal opportunities and growing funding needs, the effective distribution of costs will be of great importance. In this regard, the WB calls on the Belarusian government to mainly support solvent companies. </p> <p>   </p> <p> As previously reported, the International Monetary Fund (IMF) forecasts a 3% reduction in world GDP in 2020, and estimates the total loss of the world economy in 2020–2021 at $9 trillion. According to the IMF forecast, the economies of developed countries will shrink in 2020 by 6.1%: Italy by 9.1%, Spain by 8%, France by 7.2%, Germany by 7%, Great Britain by 6.5%, Canada by 6.2%, the US by 5.9%, and Japan by 5.2%. The IMF estimates Belarus’ GDP decline at 6% and Russia at 5.5%. The IMF predicts 5.8% year-on-year global economic growth recovery in 2021. End </p>

2020-06-10

Primepress