Worst recession since Great Depression, says World Bank

Washington, October 15

The world is experiencing one of the deepest recessions since the Great Depression in the 1930s owing to the novel coronavirus, World Bank President David Malpass has said, terming the Covid pandemic a “catastrophic event” for many developing and the poorest countries. He said given the extent of the economic contraction, there was a rising risk of disruptive debt crises in countries.

So that has got a lot of focus here at the meetings, Malpass told the media on Wednesday at the start of the annual meetings of the International Monetary Fund and the World Bank.

“The recession has been deep, one of the deepest since the Great Depression. And for many developing countries, and for the people in the poorest countries, it is truly a depression, a catastrophic event. It is continuing to add to the ranks of those in extreme poverty,” he said.

That is the focus of this meeting and the focus of their actions, he said, adding the World Bank was building as big a growth programme for countries as they can in this fiscal year.

Responding to a question, Malpass said that the world was currently experiencing a K-shaped recovery.

That means the advanced economies have been able to provide support, especially for their financial markets and for people that have jobs that can be done by working from home. But people that are in the informal economy have lost their jobs, and are depending on social protection programmes, he said. — PTI