ISLAMABAD: The Trade and Development Report 2020 (TDR 2020) has warned that due to the recession caused by COVID-19, there is a risk of an income loss of $12 trillion in global revenue by the end of 2021.
According to the details, a report released by the United Nations Conference on Trade and Development (UNCTAD) said that the recovery in growth in 2021 is expected to increase unemployment and make it economically stable. In many countries, it is likely to reach on double digits.
The rehabilitation plan must be comprehensive and bold, which is possible by focusing on the micro-economy and creating jobs, as well as requiring large investments in energy, environmental protection and sustainable roads or transportation systems.
It added, however, that fiscal policy could be used for development, as well as stabilizing the microeconomy by working on corporate and industrial policies.
According to TDR 2020, “All eyes are on 2021. If economic activity is not restored and economically stable countries continue their existing mixed fiscal and monetary measures and employment opportunities are not restored, then many countries will have fiscal deficits.” And the gap in their income will widen.
It added that the UNCTAD flagship report pointed out that there was an immediate response from the central banks to COVID-19 and that the economic downturn was temporarily averted, but Statistics from the Global Financial Crisis (GFC) show that monetary policy alone has not been able to restore the economy to where it was before the current situation and that fiscal stimulus is needed.
According to TDR 2020, given the developments in the GFC, it is possible to eliminate the fears of increasing government deficits and increasing debt in order to deal with the crisis through financial stability. It may be possible in many countries in the Middle East, and if it is not, it could be dangerous for the recovery and growthof the economy.
The report warns that the critical state of the global economy entering 2021 is a moment of concern for policymakers everywhere and income loss could also increase