Global economy will suffer for 'years to come' says OECD

OECD boss Angel Gurría says the economic shock is already bigger than the financial crisis

The world will take years to recover from the coronavirus pandemic, the Organisation for Economic Co-operation and Development has warned.

Angel Gurría, OECD secretary general, said the economic shock was already bigger than the financial crisis.

He told the BBC it was "wishful thinking" to believe that countries would bounce back quickly.

The OECD has called on governments to rip up spending rules to ensure speedy testing and treatment of the virus.

Mr Gurría said a recent warning that a serious outbreak could halve global growth to 1.5% already looked too optimistic. 

While the number of job losses and company failures remains uncertain, Mr Gurría said countries would be dealing with the economic fallout "for years to come".

He said many of the world's biggest economies would fall into recession in the coming months - defined as two consecutive quarters of economic decline.

"Even if you don't get a worldwide recession, you're going to get either no growth or negative growth in many of the economies of the world, including some of the larger ones, and therefore you're going to get not only low growth this year, but also it's going to take longer to pick up in the in the future," he added.

Big shock

Mr Gurría said the economic uncertainty created by the virus outbreak meant economies were already suffering a bigger shock than during the September 11 terror attacks or the 2008 financial crisis.

 

He said: "And the reason is that we don't know how much it's going to take to fix the unemployment because we don't know how many people are going to end up unemployed. We also don't know how much it's going to take to fix the hundreds of thousands of small and medium enterprises who are already suffering."

Governments around the world have taken unprecedented steps to support workers and businesses during the outbreak.

Policymakers in the UK have pledged to pay the wages of employees unable to work due to the coronavirus pandemic.

Mr Gurría called on governments to rip up borrowing rules and "throw everything we got at it" to deal with the crisis.

However, he warned that bigger deficits and larger debt piles would also weigh on heavily indebted countries for years to come.

No quick recovery

Mr Gurría said that just weeks ago, policymakers from the G20 club of rich nations believed the recovery would take a 'V' shape - with a short, sharp drop in economic activity followed swiftly by a rebound in growth.

"It was already then mostly wishful thinking," he said.

"I do not agree with the idea of a 'V' shaped phenomenon ... Right now we know it's not going to be a 'V'. It's going to be more in the best of cases like a 'U' with a long trench in the bottom before it gets to the recovery period. We can avoid it looking like an 'L', if we take the right decisions today."

The OECD is calling for a four-pronged plan to deal with the outbreak, including free virus testing, better equipment for doctors and nurses, cash transfers to workers including the self-employed and tax payment holidays for businesses.

Mr Gurría compared the level of ambition to the Marshall Plan - which helped to pay for the reconstruction of Europe after the Second World War. BBC

 
 

Other News

.
Over half of population to shop online by 2025
Over half of population to shop online by 2025
VIDEOicon  25/05/2020 

Vietnam is aiming to have 55 percent of its population shopping online by 2025, with average consumer spending rising to 600 USD per year, according to a master plan on e-commerce development for 2021-2025.

US becomes Vietnam’s largest supplier of fruits, vegetables
US becomes Vietnam’s largest supplier of fruits, vegetables
BUSINESSicon  25/05/2020 

The US has become Vietnam’s largest supplier of fruits and vegetables in the first four months of the year, recording a 44% increase year-on-year in export value to $102.1 million, according to the Vietnam Fruit and Vegetable Association.

Deadly new seafood virus should be prevented: Ministry
Deadly new seafood virus should be prevented: Ministry
BUSINESSicon  25/05/2020 

The Ministry of Agriculture and Rural Development (MARD) has called for strengthening the management of seafood transportation across the border.

World-famous resilience keeps up M&A appetite
World-famous resilience keeps up M&A appetite
BUSINESSicon  25/05/2020 

Although the current pandemic is spreading rapidly in many countries and causing severe damage to the global economy, Vietnam continues to effectively control the situation while ensuring that economic activities are not interrupted.

Fate of five of 12 loss-making projects uncertain with EPC contractors out of reach
Fate of five of 12 loss-making projects uncertain with EPC contractors out of reach
BUSINESSicon  24/05/2020 

The fate of five of the 12 notorious loss-making projects remain uncertain because the Chinese contractors cannot be taken to court.

EVFTA implementation requires local firms to thoroughly grasp regulations
EVFTA implementation requires local firms to thoroughly grasp regulations
BUSINESSicon  25/05/2020 

Businesses and management agencies should be fully aware of the regulations and rights included within the EU-Vietnam Free Trade Agreement (EVFTA) before the trade deal fully comes into effect.

Resort real estate anticipates quick rebound
Resort real estate anticipates quick rebound
BUSINESSicon  24/05/2020 

Resort real estate is one of the segments expected to see the fastest pace of recovery in the post-pandemic times.

Commitment level of tariffs in new-generation FTAs comes under scrutiny
Commitment level of tariffs in new-generation FTAs comes under scrutiny
BUSINESSicon  24/05/2020 

Up to 99% of tariff lines with partner countries are poised to be eliminated over the course of the 10-year roadmap set out in new-generation trade pacts 

Vietnamese retail to be at heart of post-pandemic recovery
Vietnamese retail to be at heart of post-pandemic recovery
BUSINESSicon  24/05/2020 

If the Vietnamese economy is able to successfully enjoy a rapid economic recovery following the conclusion of the novel coronavirus (COVID-19) pandemic, the retail industry will be one of the driving factors in this revival process.

Vietnam’s first private IT museum inspires young generation
Vietnam’s first private IT museum inspires young generation
SCI-TECH & ENVIRONMENTicon  24/05/2020 

Vietnam’s first information technology museum was established by Doctor Nguyen Chi Cong, former Head of the Department of Science and Technology under the Vietnam Information Technology Association.

Vietnam in favourable position in new int’l economic order thanks to EVFTA: expert
Vietnam in favourable position in new int’l economic order thanks to EVFTA: expert
BUSINESSicon  24/05/2020 

Associate Professor, Dr. Chu Hoang Long from the Australian National University (ANU) on May 23 expressed his belief that the EU-Vietnam Free Trade Agreement (EVFTA), once effective, will boost two-way trade thanks to eased tax barriers.

Vietnam Railway reports VND600bn in losses
Vietnam Railway reports VND600bn in losses
BUSINESSicon  23/05/2020 

The Vietnam Railway Corporation (VNR) is facing losses of over VND600bn (USD26m) in 2020 because of Covid-19.

Four-month earnings slow but firms hope for better months ahead
Four-month earnings slow but firms hope for better months ahead
BUSINESSicon  23/05/2020 

A number of listed companies have announced lower earnings in April after closing for half of the month.

Demand for ready-built factories and warehouses increasing: CBRE
Demand for ready-built factories and warehouses increasing: CBRE
BUSINESSicon  23/05/2020 

The development of e-commerce together with delays to import and export activities due to disrupted logistics services has accelerated demand for ready-built factories and warehouses during the COVID-19 outbreak in Viet Nam.

Real estate firms gear up for the race after pandemic
Real estate firms gear up for the race after pandemic
BUSINESSicon  23/05/2020 

 Property firms are gearing up to tap opportunities from the post-pandemic recovery of the real estate market, which was predicted to soon get back on its feet.

Vietnam ready for new investment influx
Vietnam ready for new investment influx
BUSINESSicon  23/05/2020 

Foreign investors are speeding up the restructuring and reallocation of their production networks globally, with Vietnam considered a bright candidate for investment given its location within the world’s most dynamically-developing region.

S&P maintains stable outlook for Vietnam’s sovereign credit rating
S&P maintains stable outlook for Vietnam’s sovereign credit rating
BUSINESSicon  23/05/2020 

S&P Global Ratings has announced it has retained Vietnam’s sovereign credit rating at BB, with a stable outlook, according to the Ministry of Finance.

Vietnam to launch mobile money in June
Vietnam to launch mobile money in June
BUSINESSicon  25/05/2020 

Mobile money is about to be launched in Vietnam despite worries about management methods.

Covid-19 resets operational mode of VN retail market
Covid-19 resets operational mode of VN retail market
BUSINESSicon  23/05/2020 

Revenue from e-commerce has increased rapidly during Covid-19, but many traditional retailers have had to give back business premises to landlords.

Weak growth outlook to spur further monetary easing in Vietnam: Fitch Solutions
Weak growth outlook to spur further monetary easing in Vietnam: Fitch Solutions
BUSINESSicon  22/05/2020 

Given the weak economic outlook in Vietnam, Fitch Solutions expects further easing measures to be applied over the rest of 2020 as the country is still targeting real gross domestic product (GDP) growth above 5%.

 
 
 
Leave your comment on an article

OR QUICK LOGIN