Regardless of whether or not the Covid-19 pandemic strengthens again later in the year, the OECD said that the economic fallout from the pandemic will be long and harsh. The group presented two scenarios for 2020. One in which the coronavirus is brought under control, and one in which there is a second global outbreak before the end of the year. Both show an extreme global economic contraction and a huge number of unemployed people that will, by extension, probably lower demand for commodities.
Should a second outbreak lead to renewed lockdown measures, the global economy will contract by 7.6 percent this year. Even in the absence of a second wave, the global economy will shrink by 6 percent. In both cases, it will take more than two years to return to pre-pandemic levels.
Europe will bear the brunt of the economic pain. The OECD forecasts double-digit contractions in the economies of Spain, France and Italy however the pandemic develops. It said the eurozone's gross domestic product (GDP) will fall by 11.5 percent this year if a second wave breaks out, and by more than 9 percent otherwise. US GDP will fall by 8.5 percent with a second wave and by 7.3 percent without, while Japan's economy will contract by 7.3 percent and by 6 percent under those respective scenarios.
