OECD updates G20 summit on outlook for global economy
Efforts to contain virus and save lives should be intensified, and governments should plan stronger, more coordinated measures to absorb growing economic blow
Increasingly stringent containment measures needed to slow the spread of the Coronavirus (Covid-19) will necessarily lead to significant short-term declines in GDP for many major economies, according to new OECD projections.
OECD Secretary-General Angel Gurría, in preparation to the G20 Virtual Summit that took place yesterday, unveiled the latest OECD estimates showing that the lockdown will directly affect sectors amounting to up to one third of GDP in the major economies. For each month of containment, there will be a loss of 2 percentage points in annual GDP growth. The tourism sector alone faces an output decrease as high as 70%. Many economies will fall into recession. This is unavoidable, as we need to continue fighting the pandemic, while at the same time putting all the efforts to be able to restore economic normality as fast as possible.
“The high costs that public health measures are imposing today are necessary to avoid much more tragic consequences and even worse impact on our economies tomorrow,” Mr Gurría said. “Millions of deaths and collapsed health care systems will decimate us financially and as a society, so slowing this epidemic and saving human lives must be governments’ first priority.
“Our analysis further underpins the need for sharper action to absorb the shock, and a more coordinated response by governments to maintain a lifeline to people and a private sector that will emerge in a very fragile state when the health crisis is past.”