THE coronavirus will cause global economic output to contract by 5.2 percent in 2020, the World Bank said Monday, warning that its latest forecasts would be revised downward if uncertainty over the pandemic and business lockdowns persist.

In its latest Global Economic Prospects report, the World Bank said that advanced economies are expected to shrink 7 percent in 2020, while emerging market economies will contract 2.5 percent, their first since aggregate data became available in 1960. On a per-capita GDP basis, the global contraction will be the deepest since 1945-46 as World War II spending dried up.

The updated forecasts show more damage to the economy than estimates released in April by the International Monetary Fund (IMF), which predicted a 3 percent global contraction in 2020.

The IMF plans to update its forecasts June 24 and Managing Director Kristalina Georgieva has said that further cuts are “very likely.”

World Bank officials said their baseline scenario assumes that social distancing lockdowns and temporary business closures begin to ease at the end of June.

But the report shows a downside scenario in which lockdowns are extended by three months this year. (SD-Agencies)