Daily Practice Sheet 9 June 2020

June 9, 2020
Posted by: OptimizeIAS Team
Category: DPS

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Gairsain

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The World Bank on Monday predicted a 3.2 per cent contraction in India’s economy during the current fiscal year. In its latest Global Economic Prospects report, the World Bank said that the global economy is expected to contract by 5.2 per cent as a result of the COVID-19 pandemic. This will be the deepest recession in global economy since the Second World War, the World Bank also said.

The World Bank report said that advanced economies are expected to shrink 7 per cent in 2020, while emerging market economies will contract 2.5 per cent, their first since aggregate data became available in 1960. On a per-capita GDP basis, the global contraction will be the deepest since 1945-46

The recession is the first since 1870 to be triggered solely by a pandemic, it said the latest edition of the Global Economic Prospect report. The report said that the global economy has experienced 14 global recessions since 1870: in 1876, 1885, 1893, 1908, and 1914, 1917-21, 1930-32, 1938, 1945-46, 1975, 1982, 1991, 2009 and 2020.

The impact: Per capita incomes are expected to decline by 3.6%, which will tip millions of people into extreme poverty this year, according to the report. Beyond the staggering economic impacts, the pandemic will also have severe and long-lasting socio-economic impacts that may well weaken long-term growth prospects — the plunge in investment because of elevated uncertainty, the erosion of human capital from the legions of unemployed and the potential for ruptures of trade and supply linkages. Interruptions in schooling and primary healthcare access are likely to have lasting impacts on human capital development, the bank said.