A stronger-than-expected rebound this year will still leave the world down an estimated 10 trillion dollars due to the coronavirus pandemic and lockdowns, according to the United Nations Conference on Trade and Development (UNCTAD).
Although the global economy could expand by 4.7 per cent in 2021, it will nonetheless wind up "short of 10 trillion dollars" - about twice Japan's gross domestic product (GDP) - compared to if the pandemic had never happened, according to UNCTAD on Thursday.
Last year, the global economy "posted its sharpest annual drop in output since statistics on aggregate economic activity were introduced in the early 1940s," UNCTAD said in a new report.
While wealthy economies have proposed huge damage-limitation fiscal spending, such as the United States' 1.9-trillion-dollar "stimulus package," and while China returned to growth in late 2020, people in smaller and poorer countries are struggling, UNCTAD warned.
Developing countries are bearing the brunt of the downturn due to "limited fiscal space, tightening balance of payments constraints and inadequate international support," leading to "some of the largest personal income drops relative to GDP."
"Even a small downturn in economic activity can be devastating," UNCTAD said, describing fallout from pandemic restrictions as "predictably severe" in developing economies such as the Philippines and Malaysia.
On Thursday, UNCTAD also upped its earlier prediction of 4.3-per-cent global growth in 2021, citing a possible "stronger recovery in the United States."
In January, the World Bank said the global economy could grow by 4 per cent in 2021, while the International Monetary Fund opted for a rosier 5.5 per cent.