Can the world recover quickly from COVID-19? That thought is “wishful thinking,” according to the Organisation for Economic Co-operation and Development (OECD) secretary general Angel Gurria. He told the BBC that the pandemic has already caused an economic shock that is already larger and more impactful than the 2008 financial crisis, and that the world will feel the fallout “for years to come.”
Weeks ago, G20 policymakers projected that there would be a V-shaped recovery, where a swift rebound in growth would take place after a sharp but short drop in economic activity. Gurria disagrees and has said that “It was already then mostly wishful thinking.”
“I do not agree with the idea of a ‘V’ shaped phenomenon… 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,” he added.
OECD’s growth forecast for 2020 has been cut to only 2.4% in 2020 from 2.9% in November 2019. The think tank has warned, however, that that number may drop to 1.5% if a longer and more intensive outbreak happens.