UN To Revise World Economic Forecasts By Mid-May To Account For COVID-19 Impact - Officer

MOSCOW (UrduPoint News / Sputnik - 03rd April, 2020) The United Nations will revise its projections for the global economic outlook given the impact of the COVID-19 pandemic by mid-May, an economic affairs officer at the UN Department of Economic and Social Affairs (DESA) told Sputnik.

On Wednesday, the DESA said that the world economy might shrink up to 1 percent in 2020 because of the pandemic. It said that even in the best-case scenario the world economy should not expect to grow more than 1.2 percent. In the worst-case scenario, global output would contract by 0.9 percent instead of growing 2.5 percent, as previously anticipated.

"Our last economic forecasts and the global economic outlook are not valid any more, and we are in the process of preparing a revised version (a mid-year update), to be released in mid-May," Grigor Agabekian said, when asked about the pandemic's impact on the UN's economic forecast for the world.

Agabekian, who is also a co-author of the "UN Global Economic Outlook" report, which also predicts growth for individual countries and regions, shared a paper with some of the updated figures with Sputnik.

It follows from the document that given the recent sharp fall in oil prices with the UN's baseline of $61 per barrel, as well as further restrictions on movements and economic activities in the United States and the European Union, the world economy is likely to shrink even more. Production disagreements between Russia and Saudi Arabia are expected to add up to high uncertainty in the global oil market, especially for commodity-exporting economies, many of which have not fully recovered from the after-effects of the sharp commodity price decline of 2014-2016.

Brent oil futures have been fluctuating dramatically down to multi-year lows over the past several weeks, with the price slightly over $32 as of Friday.

According to the DESA's recent update, governments rolling out large stimulus packages to avert a sharp downturn of their economies amid increased pressure on their health care systems and job markets due to COVID-19 can potentially plunge the global economy into a deep recession.

In a domino effect, the prolonged restrictions on economic activities in developed economies are expected to soon spill over to developing countries through trade and investment channels. In particular, an acute decline in consumer spending in the EU and the US will inevitably reduce consumer goods imports from developing economies, and further disruptions to global supply chains can contract global manufacturing production significantly, the DESA expects.

The World Health Organization declared COVID-19 a pandemic on March 11. To date, close to 100 countries have closed their borders to curb the spread of the infection through import. As of Friday, the global toll of COVID-19 has exceeded one million cases with over 53,000 fatalities, according to statistics compiled by the Johns Hopkins University.