Global Coronavirus Recession Will Hit Poor Countries the Most
The Covid-19 pandemic may affect economic growth for developing countries the most.
David Malpass, the World Bank President, shared this concern on Wednesday.
In a Squawk on the Street interview, he also said that we could make further progress on access to clean water, sanitation, and electricity. But the biggest challenge is that we’re going backwards because of the global recession.
The coronavirus outbreak continues to have a devastating impact on the global economy as the disease continues to spread.
It has disrupted the supply chain, and tens of millions of the workforce have lost their jobs. Or their hours reduced as various governments implement restrictions to minimize transmissions.
The International Monetary Fund (IMF) said the pandemic will cause the world to experience the worst recession since the Great Depression.
On Tuesday, Malpass said the pandemic was a huge problem. He also added that the world recession would be deep and mostly affecting poorer countries.
World Bank supports developing countries in response to Covid-19
In April, the World Bank approved of a $1.9 billion funding program for developing countries to help support their response to Covid-19.
In March, the World Bank also approved billions of dollars for coronavirus aid.
Malpass said that populous countries needed extra support too.
For example, the World Bank has approved a $1 billion project specifically for India. This week India extended its national lockdown to slow down the spread of the disease. India has confirmed more than 11,000 cases.
Malpass also reiterated that the World Bank was prepared to spend up to $160 billion over the next 15 months to support economic rebuilding.
Economic recovery in developing countries depends on what happens in major economies such as Europe and the US.
Malpass said strong growth in the developed world is what would help developing countries the most.
He called on global central banks to do their part to ensure small businesses through the storm.
The IMF, which is part of the World Bank, is trying to do the same in developing countries.
The IFC is providing working capital lines of credit to keep small businesses open so that they can be ready for a recovery.
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