THE global economy will take years to recover from the coronavirus pandemic, an international trade body warned today.
Angel Gurría, head of OECD, said the economic shock was already bigger than the financial crisis of 2008 and the idea of a quick bounce-back was “wishful thinking”.
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The crisis has sent world markets into freefall as experts warned millions will be unemployed and companies will go bust.
And the OECD – a club of 36 leading economies – warned many countries will go into recession in the coming months and would be dealing with the fallout “for years to come”.
Mr Gurría told the BBC: “Even if you don’t get a worldwide recession, you’re going to get either no growth or negative growth in many of the economies of the world, including some of the larger ones.
“And therefore you’re going to get not only low growth this year, but also it’s going to take longer to pick up in the in the future,” he added.
Mr Gurría said the uncertainty created by the virus outbreak meant economies were already suffering a bigger shock than after the September 11 terror attacks or the 2008 financial crisis.
He said: “We don’t know how many people are going to end up unemployed. We also don’t know how much it’s going to take to fix the hundreds of thousands of small and medium enterprises who are already suffering.”
Mr Gurría called on governments to rip up borrowing rules in response to the crisis and “throw everything we got at it”.
He said last week the G20 group of rich nations was predicting a V-shaped dip, with a steep decline followed by a rapid recovery.
He told the BBC: “It was already then mostly wishful thinking.
“Right now we know it’s not going to be a V. It’s going to be more in the best of cases like a U with a long trench in the bottom before it gets to the recovery period.
“We can avoid it looking like an L if we take the right decisions today.”
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Last week US Treasury Secretary Steve Mnuchin warned unemployment could hit 20 per cent for the first time since the Great Depression of the 1930s.
Donald Trump says he wants the US lockdown finished by the end of March to save the economy, insisting “we cannot let the cure be worse than the problem itself.”
Governments around the world have pledged money to support workers and businesses threatened by the virus.
Britain’s Chancellor Rishi Runak promised a £330bn package, including loans and tax breaks for businesses and guaranteeing 80 per cent of workers’ salaries.
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The Bank of England also slashed interest rates to just 0.1 per cent, the lowest in its 400-year history.
Ministers are considering forcing non-essential shops to shut after some Brit flouted stay-at-home pleas to halt the spread.
The death toll hit 289 today as experts said the UK is following a similar trajectory to Italy where more than 5,000 have died.
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