Sukhjit Starch & Chemicals Ltd Management Discussions.

Global Economy

The swift and massive shock of the coronavirus pandemic and shutdown measures to contain it have plunged the global economy into a severe contraction. According to World Bank forecasts, the global economy will shrink by 5.2% this year.That would represent the deepest recession since the Second World War, with the largest fraction of economies experiencing declines in per capita output since 1870, the World Bank says in its June 2020 Global Economic Prospects.

Economic activity among advanced economies is anticipated to shrink 7% in 2020 as domestic demand and supply, trade, and finance have been severely disrupted. Emerging market and developing economies (EMDEs) are expected to shrink by 2.5% this year, their first contraction as a group in at least sixty years. Per capita incomes are expected to decline by 3.6%, which will dip millions of people into extreme poverty this year.

Table 1. Real GDP Percentage point differences

(Percent change from previous year) from January 2020 projections

2017 2018 2019c 2020f 2021f 2020f 2021f
World 3.3 3.0 2.4 --5.2 4.2 --7.7 1.6
Advanced economics 2.5 2.1 1.6 -7.0 3.9 --8.4 2.4
United States 2.4 2.9 2.3 --6.1 4.0 --7.9 2.3
Euro Area 2.5 1.9 1.2 --9.1 4.5 --10.1 3.2
Japan 2.2 0.3 0.7 --6.1 2.5 --6.8 1.9
Emerging market and developing economics 4.5 4.3 3.5 --2.5 4.6 --6.6 0.3
Commodity-exporting EMDEs 2.2 2.1 1.5 --4.8 3.1 --7.4 0.2
Other EMDEs 6.1 5.7 4.8 --1.1 5.5 --6.2 0.3
Other EMDEs excluding China 5.4 4.8 3.2 --3.6 3.6 --7.6 --0.8
East Asia and Pacific 6.5 6.3 5.9 0.5 6.6 --5.2 1.0
China 6.8 6.6 6.1 1.0 6.9 --4.9 1.1
Indonesia 5.1 5.2 5.0 0.0 4.8 --5.1 --0.4
Thailand 4.1 4.2 2.4 --5.0 4.1 --7.7 1.3
Europe and Central Asia 4.1 3.3 2.2 --4.7 3.6 --7.3 0.7
Russia 1.8 2.5 1.3 --6.0 2.7 --7.6 0.9
Turkey 7.5 2.8 0.9 --3.8 5.0 --6.8 1.0
Poland 4.9 5.3 4.1 --4.2 2.8 --7.8 -0.5
Latin America and the Caribbeam 1.9 1.7 0.8 --7.2 2.8 --9.0 0.4
Brazil 1.3 1.3 1.1 --8.0 2.2 --10.0 --0.3
Mexico 2.1 2.2 --0.3 --7.5 3.0 --8.7 1.2
Argentina 2.7 --2.5 --2.2 --7.3 2.1 --6.0 0.7
Middle East and North Africa 1.1 0.9 --0.2 --4.2 2.3 --6.6 --0.4
Saudi Arabia --0.7 2.4 0.3 --3.8 2.5 --5.7 0.3
Iran 3.8 --4.7 --8.2 --5.3 2.1 --5.3 1.1
Egypt2 4.2 5.3 5.6 3.0 2.1 --2.8 --3.9
South Asia 6.5 6.5 4.7 --2.7 2.8 --9.2 --3.1
India2 7.0 6.1 4.2 --3.2 3.1 --9.0 --3.0
Pakistan2 5.2 5.5 1.9 --2.6 --0.2 --5.0 --3.2
Bangladesh2 7.3 7.9 8.2 1.6 1.0 --5.6 --6.3
Sub-Saharan Africa 2.6 2.6 2.2 --2.8 3.1 --5.8 0.0
Nigeria 0.8 1.9 2.2 --3.2 1.7 --5.3 --0.4
South Africa 1.4 0.8 0.2 --7.1 2.9 --8.0 1.6
Angola --0.1 --2.0 --0.9 --4.0 3.1 --5.5 0.7
Memorandum items :
Real GDP1
High-income countries 2.4 2.2 1.7 --6.8 3.8 --8.3 2.3
Developing countries 4.8 4.4 3.7 --2.4 4.7 --6.7 0.2
Low-income countries 5.4 5.8 5.0 1.0 4.6 --4.4 -0.9
Brics 5.3 5.3 4.7 -1.7 5.3 --6.6 0.4
World (2010 PPP weights)4 3.9 3.6 2.9 --4.1 4.3 --7.3 1.0
World trade volume5 Commodity prices6 5.9 4.0 0.8 --13.4 5.3 --15.3 2.8
Oil price 23.3 29.4 -10.2 --47.9 18.8 --42.5 16.9
Non-energy commodity price index 5.5 1.8 -4.2 --5.9 3.0 --6.0 1.3

Source : World Bank