Policymakers Must Coordinate Route to Global Recovery

Key points

• The Covid-19 pandemic and the effects of the measures taken to protect lives continue to dominate the short-term global economic outlook.
• In still highly uncertain times, there are widespread falls in GDP as lockdowns pause many forms of economic activity. Some countries are now starting to unlock, permitting a wider range of economic activities to be undertaken and allowing increased mobility. The effects of unlocking are uncertain, especially with the number of people infected still rising.
• We project that global GDP will fall by 5 per cent this year, a substantially larger fall than during the financial crisis, taking global GDP back to 2018 levels, with unemployment rising as a consequence.
• Once economic activity re-establishes after lockdowns are lifted, the increase in output could result in substantial year-on-year increases in GDP next year. We project an increase of 6¼ per cent in global GDP. Even with such an increase, however, the level of GDP at the end of 2021 will be lower than had the pandemic not occurred.