New Delhi: The World Bank and the International Monetary Fund said the global economic contraction caused by the ongoing coronavirus pandemic is the largest in the last eight decades, raising the world poverty rate, exacerbating inequalities and damaging long-term economic growth prospects. The WB and IMF concluded their annual meeting here on Friday, which heavily revolved around the impact of COVID-19.
“The pandemic has resulted in the largest global economic contraction of the last eight decades: it is impacting developing, emerging and developed economies; increasing the global poverty rate; exacerbating inequalities; and damaging long-term economic growth prospects,” according to a joint-ministerial communique issued by the two UN-backed institutions.
The associated lockdowns, restrictions and continued uncertainty have caused investments, trade, and remittance flows to plummet, eroded jobs and human capital, kept children out of school, and pressured food and medical supply chains, it said.
The monetary institutions warned that the humanitarian crisis can further exacerbate fragility, conflict, and violence as well as intensify risks, including in small island states. The economic crisis is threatening the lives and livelihoods of vulnerable populations, including women-led households, youth and the elderly, refugees and displaced people.
It is also widening gender gaps and jeopardising hard-won development gains and prospects for girls and children overall, it said.
Commending the World Bank for the speed and scale of its COVID-19 response across countries, the joint communique said that the bank is supporting countries’ efforts to strengthen health systems and should continue to do so.