A second lockdown would pitch the economy into full-blown depression… World Bank chief: ‘This crisis must be seen as an economic depression; the question is how long it will last’

A second lockdown would pitch the economy into full-blown depression

World Bank chief: ‘This crisis must be seen as an economic depression; the question is how long it will last’

Before even hearing the first question, World Bank President David Malpass, 64, speaks out to emphasize the “very worrisome” data about the increase in extreme poverty. It is his main concern right now, and the numbers back it up: the coronavirus pandemic will leave up to 150 million more people below that threshold, breaking more than two decades of uninterrupted decline on a global scale.

“We are in the depths of the recession and this is very worrisome. The effects of poverty are long-term: it is urgent to reverse this trend, and that requires for economies to get back to some kind of growth,” says Malpass. Unlike the managing director of the International Monetary Fund (IMF), Kristalina Georgieva, who has ruled out an economic depression derived from the coronavirus crisis, the American economist does believe that the world is immersed in one: the question is how long it will last. His hope is that it will be shorter than the Great Depression of the 1930s.

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Question. According to the World Bank’s own records, the coronavirus crisis has caused the largest economic contraction in 90 years. Where are we at right now?

Answer. Some advanced economies are beginning to have an uplift. The forecasts reached their worst point in May and June, and since then, the new forecasts are beginning to go up for the advanced economies. The problem is that the average of the developing world, except for China, is still getting worse in terms of the forecast. And that includes both the poorest nations and middle-income countries, many of them in Latin America.

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