Coronavirus is a ‘devastating blow’ for the global economy, according to the president of the World Bank.
David Malpass, an economist who has run the bank since last year, also said the fallout from the pandemic could last for a decade.
Last month he warned that the coronavirus crisis could push 60m people into “extreme poverty”, which the World Bank defines as living on less than $1.90 (£1.55) per person per day.
In an interview with BBC Radio 4’s The World This Weekend, Malpass said coronavirus “has been a devastating blow for the economy.”
The combination of the pandemic itself, and the shutdowns, has meant billions of people whose livelihoods have been disrupted. That’s concerning. Both the direct consequences, meaning lost income, but also then the health consequences, the social consequences, are really harsh.”
He added: “We can see that with the stock market in the US being relatively high, and yet people in the poor countries being not only unemployed, but unable to get any work even in the informal sector. And that’s going to have consequences for a decade.”
The World Bank has already been providing support to the worst affected countries, but is calling on banks and pension funds to offer debt relief to developing countries.
Malpass told the BBC he would also like commercial lenders to make the terms of their loans clearer, so investors have more confidence when putting money into those economies.
Although the damage to global trade is a challenge, Malpass maintained that the “catastrophe” could be overcome since people are “flexible, they’re resilient”.
“I think it’s possible to find paths, it’s word work for countries and governments to do that. But we can encourage that effort”. He concluded he was an “optimist, over the long run human nature is strong, and innovation is real. The world is moving fast and connectivity… has never been higher. And so that gives hope for the future.”