Prolonged global recession expected: WEF report

A LONG-LASTING global recession is expected by risk managers amid the coronavirus pandemic, a report by the World Economic Forum (WEF) said yesterday. A two-thirds majority of the 347 participants in the report said a contraction in the global economy is their biggest concern over the next 18 months. The global economy slump is expected to cause bankruptcies and a high level of unemployment rates, the report also said.

RISK managers expect a prolonged global recession as a result of the coronavirus pandemic, a report by the World Economic Forum showed yesterday.

Two-thirds of the 347 respondents to the survey – carried out in response to the outbreak – put a lengthy contraction in the global economy top of their list of concerns for the next 18 months.

Half of the risk managers expected bankruptcies and industry consolidation, the failure of industries to recover and high levels of unemployment, particularly among the young.

The debt accrued in the rescue packages could depress government and corporate finances and retard growth for years, and also stymie efforts to combat climate change, the report said.

Recessions on a scale not seen since the 1930s Great Depression demand more action from governments to ensure a timely recovery and to put growth on a healthier path, the report also said.

“The crisis has devastated lives and livelihoods. It has triggered an economic crisis with far-reaching implications and revealed the inadequacies of the past,” said Saadia Zahidi, managing director of the World Economic Forum.

Environmental goals risk being discarded as a result of the pandemic, the report said, but governments should try to carve out a “green recovery.”

“We now have a unique opportunity to use this crisis to do things differently and build back better economies that are more sustainable, resilient and inclusive,” Zahidi said.

The report was compiled by the World Economic Forum’s Global Risks Advisory Board together with Marsh & McLennan Companies Inc. and Zurich Insurance Group.

Risk managers were surveyed between April 1 and 13.