HospitalityBiz India
Hotels FoodService Operations Ministry Associations Equipment Editorial HR Technology Technology Advisory Board Community
Follow us on Facebook Follow us on Twitter instagram
    Home > F&B Overview > News
NEWS

Covid-19: World economy will go into recession with likely exception of India, China, says UN report

Wednesday, April 1, 2020, 10:00 Hrs  [IST]
HBI Staff | Hyderabad

According to the Times of India,
The world economy will go into recession this year with a predicted loss of trillions of dollars of global income due to the coronavirus pandemic, spelling serious trouble for developing countries with the likely exception of India and China, according to a latest UN trade report.

With two-thirds of the world's population living in developing countries facing unprecedented economic damage from the COVID-19 crisis, the UN is calling for a USD 2.5 trillion rescue package for these nations.


Not even a week into the nationwide lockdown, main markets in Chennai were buzzing with activity as people turned up with their families in large numbers

According to the new analysis from United Nations Conference on Trade and Development (UNCTAD), the UN trade and development body titled 'The COVID-19 Shock to Developing Countries: Towards a 'whatever it takes' programme for the two-thirds of the world's population being left behind', commodity-rich exporting countries will face a USD 2 trillion to $3 trillion drop in investments from overseas in the next two years.

The UNCTAD said that in recent days, advanced economies and China have put together massive government packages which, according to the Group of 20 leading economies (G20), will extend a USD 5 trillion lifeline to their economies.
"This represents an unprecedented response to an unprecedented crisis, which will attenuate the extent of the shock physically, economically and psychologically," it said.

"This represents an unprecedented response to an unprecedented crisis, which will attenuate the extent of the shock physically, economically and psychologically," it said.

It added that while the full details of these stimulus packages are yet to be unpacked, an initial assessment by the UNCTAD estimates that they will translate to a  USD1 trillion to USD2 trillion injection of demand into the major G20 economies and a two percentage point turnaround in global output.

"Even so, the world economy will go into recession this year with a predicted loss of global income in trillions of dollars. This will spell serious trouble for developing countries, with the likely exception of China and the possible exception of India," the UNCTAD said.
The report, however, did not give a detailed explanation as to why and how India and China will be the exceptions as the world faces a recession and loss in global income that will impact developing countries.

Further, given the deteriorating global conditions, fiscal and foreign exchange constraints are bound to tighten further over the course of the year.

The UNCTAD estimates a USD2 trillion to USD3 trillion financing gap facing developing countries over the next two years.

In the face of a looming financial tsunami this year, the UNCTAD proposes a four-pronged strategy that could begin to translate expressions of international solidarity into concrete action.
This includes a USD1 trillion liquidity injection for those being left behind through reallocating existing special drawing rights at the International Monetary Fund; a debt jubilee for distressed economies under which another one trillion dollars of debts owed by developing countries should be cancelled this year and a 500 billion dollars Marshall Plan for a health recovery funded from some of the missing official development assistance (ODA) long promised but not delivered by development partners.

"The economic fallout from the shock is ongoing and increasingly difficult to predict, but there are clear indications that things will get much worse for developing economies before they get better," UNCTAD secretary-general Mukhisa Kituyi said.

The report shows that in two months since the virus began spreading beyond China, developing countries have taken an enormous hit in terms of capital outflows, growing bond spreads, currency depreciations and lost export earnings, including from falling commodity prices and declining tourist revenues.

Lacking the monetary, fiscal and administrative capacity to respond to this crisis, the consequences of a combined health pandemic and a global recession will be catastrophic for many developing countries and halt their progress towards the Sustainable Development Goals.

Even as advanced economies are discovering the challenges of dealing with a growing informal workforce, this remains the norm for developing countries, amplifying their difficulties in responding to the crisis.

"Advanced economies have promised to do 'whatever it takes' to stop their firms and households from taking a heavy loss of income," said Richard Kozul-Wright, UNCTAD's director of globalisation and development strategies.

He added: "But if G20 leaders are to stick to their commitment of 'a global response in the spirit of solidarity', there must be commensurate action for the six billion people living outside the core G20 economies".

According to reports, the death toll from the coronavirus pandemic has soared past 35,000 while the number of confirmed cases topped 750,000 globally.

 
Print News Email News Back
Bookmark to Add to NewsvineNewsvine Bookmark with del.icio.usdel.icio.us Digg ItDigg
Add RSS to Add to Google Add to My Yahoo! Subscribe with Bloglines Subscribe
 POST A COMMENT
* Name :    
* Email :    
* Message :  
   
RELATED NEWS
»  Advani Hotels and Resorts (India) Limited reports audited financial results for Financial Year 2021-2022
»  Mistakes one should avoid while setting up a beer brand in India
»  Mistakes one should avoid while setting up a beer brand in India
»  Hilton continues to expand its presence in India with the signing of Hilton Hyderabad Resort & Spa
»  Beam Suntory brings modern-day gin-naissance to India with the launch of Sipsmith
»  Sattvik Council of India honoured the Bhartiya Sabhyata Evam Sanskriti Parva with its Sattvik Verified food
»  7 Apple Hotels & Resorts Brings Hospitality Experience To The Business Capital of India
»  Lavazza India launches its third training center in India
»  Magnolia Bakery India launches a special range of sublime summertime sweets
»  Ruchika Gupta appointed as Marketing Director at Beam Suntory India
»  The Resort Mumbai celebrates World Hand Hygiene Day
»  Choice Hotels India strengthens footprints in Rishikesh with Comfort Inn Rishikesh
»  Accor appoints Sneh Jha as Director of Marketing & Communications for India and South Asia
»  McDonald’s India North & East partners Punjab Kings as official meal partner; to offer Punjab Kings Meal
»  FHRAI-IHM Signs MoU With Sattvik Council of India
»  Pernod Ricard appoints Richa Singh as the CFO of Pernod Ricard South Asia and India
»  Burman Hospitality join hands with Sesame Workshop India to Empower Early Childhood Education across 1,000 Anganwadi Centers in Uttar Pradesh
»  Hilton Expands Presence in India with the opening of Hilton Garden Inn Pune Hinjawadi
»  Accor appoints Laure Morvan as Chief Development Officer for India, Middle East, Africa & Turkey region
»  Grand Mercure Bengaluru at Gopalan collaborates with Zero Percent India to launch an exclusive range of knocktails
 
CoverStory
Analysis
 
  The Indian Institute of Architects (IIA) Natcon 2020 virtual event concludes successfully
  Winners of The Park Elle Décor Student Contest felicitated at Indian Design ID 2020
 
weekly
Receive the best of Hospitality content in your mailbox.
Weekly e-Newsletter
Events Calendar




Events
 
 
people
interview
newappoint
expert
© Copyright 2016 Saffron Synergies Pvt Ltd
HOME   |   ABOUT US   |   CONTACT US   |   FEEDBACK   |   DISCLAIMER   |   SITE MAP   |   ARCHIVES