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UN report says COVID-19 led to unprecedented income destruction in developing countries

According to the latest report by UN Conference on Trade and Development, the global economy is set to grow by 4.7 percent but governments will have to keep the support coming as COVID-19 will have lasting economic consequences.

March 18, 2021 / 01:08 PM IST
Source: Twitter

Source: Twitter

The United Nations (UN) has said the "exorbitant" impact of the COVID-19 pandemic led to the “destruction of income on an unprecedented scale”, with people in developing countries particularly hard hit.

According to the latest report by UN Conference on Trade and Development (UNCTAD), the global economy is set to grow by 4.7 percent this year, thanks to a stronger-than-expected recovery in the United States.

In its previous forecast in September, the growth rate was set at 4.3 percent. The upwards revision factors in an expected boost in US consumer spending on the back of progress distributing COVID-19 vaccines and a vast stimulus package, the report said.

“The global recovery that began in the third quarter of 2020 is expected to continue through 2021, albeit with a good deal of unevenness and unpredictability, reflecting epidemiological, policy and coordination uncertainties,” the report said.

However, the 22-page UNCTAD report called ‘Out of the frying pan...into the fire?’ said COVID-19 will have lasting economic consequences that will require continued government support. It said the main risk to the global outlook is a “misguided return to austerity”.


COVID-19 Vaccine

Frequently Asked Questions

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A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

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The report estimates that in 2020, there was a 3.9 percent drop in output as the spread of the coronavirus sparked lockdowns across the world.

It added that it would have been worse had central banks not taken preemptive action to avoid a financial meltdown. Relief packages and a bounce-back in commodity prices as well as the fast-tracking of vaccine development also helped.

(Inputs from Reuters)
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first published: Mar 18, 2021 01:08 pm
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