Is The Global Economy In Trouble? What The World Bank President Said About The Coronavirus Impact

World Bank President David Malpass said Friday that the ongoing coronavirus pandemic is a “devastating blowout” for the global economy, and said the economic fallout from the virus could last a decade. Countries around the world have forced non-essential businesses to shut down in order to prevent the spread of infection.

"The combination of the pandemic itself, and the shutdowns, has meant billions of people whose livelihoods have been disrupted. That's concerning,” he told BBC Radio 4 program The World This Weekend. "Both the direct consequences, meaning lost income, but also then the health consequences, the social consequences, are really harsh."

Malpass said the virus could increase global economic inequality.

"We can see that with the stock market in the U.S. being relatively high, and yet people in the poor countries being not only unemployed but unable to get any work even in the informal sector. And that's going to have consequences for a decade,” he continued.

Malpass claims the world economy could be less interconnected in the future, due to the impact of the virus on global trade. He believes that countries and governments could bounce back from the virus, as he says people are “flexible” and “resilient.”

Gita Gopinath, the chief economist for the International Monetary Fund, said in April the coronavirus crisis constitutes the “worst economic downturn since the Great Depression.” The IMF projects global growth to decrease by 3% this year.

The pandemic was partially responsible for the U.S. GDP shrinking by 4.8% in the first quarter. China saw a 6.8% annual drop in the first quarter, the first decline since at least 1992. Japan, the world’s third-largest economy, shrank at an annual pace of 3.4% in the first quarter. The European Union saw its GDP decrease by an estimated 3.5% in the first quarter of 2020, compared with the previous quarter.

The coronavirus likely originated at an animal and seafood market in the Chinese city of Wuhan. As of Sunday at 10:45 a.m. ET, there are nearly 7 million cases of the virus worldwide, with the global death toll over 400,000.