By comparison, the global recession
triggered by the Great Depression of the
1930s saw growth shrink by 4.8% on
average from 1930 through 1932. The 2008
financial crisis triggered a 1.8% drop in
global output in 2009.
“If history is any guide, the global economy
is heading for a decade of growth
disappointments unless policy makers put
in place comprehensive reforms,” the bank
warned, citing the global pandemic layered
over economic trends already in play.
“While the global economy appears to have
entered a subdued recovery, policymakers
face formidable challenges in public health,
debt management, budget policies, central
banking and structural reforms,” said World
Bank President David Malpass.
The bank said global growth will be aided by
a recovery this year to GDP growth of 3.5%
in the United States and an even bigger 7.9%
rebound in China, the world’s two biggest
economies. For 2020, the World Bank expects
GDP in the United States to fall by 4.3% while
it predicted a modest 2% increase in China.
Because of the uncertainty caused by
the current resurgence in virus cases and
initial problems in distributing vaccines,
the World Bank cautioned that its forecast
is highly uncertain.
Under a scenario where virus cases continue
to rise and the rollout of the vaccine does not
accelerate, global growth could be reduced to
a meager 1.6% this year.