Economic Forecast: Covid-19 to slash global economic output by $8.5trn – 305 million full time jobs could be lost in Q2

14th May 2020 (Last Updated May 14th, 2020 10:10)

14 May

Covid-19 is to slash global economic output by $8.5 trillion over next two years, wiping out nearly all gains of the previous four years according to the United Nations World Economic Situation and Prospects report.

The report highlights the pandemic could foster a new normal, fundamentally reshaping human interactions, inter-dependence, trade and globalization, while accelerating digitalization and automation.

A rapid surge in economic activities online will likely eliminate many existing jobs, while creating new jobs in the digital economy.

The United Nations’s International Labour Organization predicts 1.6bn informal economy workers could suffer “massive damage” to their livelihoods.

In the second quarter of 2020, Covid-19 may cost the equivalent of 305 million full-time jobs.

Current G7 jobless totals vary widely, from 30 million in the United States to 1.76 million in Japan.

McKinsey believe that Europe’s CEOs will have to draw on the region’s spirit of innovation to recover post Covid-19.

However, the region with its vast innovation and ideas has seen companies struggling to monetise and commercialise ideas:

“A lot of good ideas that originated in Europe, in areas such as big data, robotics, and artificial intelligence (AI), for example, are often not scaled at all or adopted and brought to market by foreign investors.”

McKinsey also add that: “No European company established in the past 30 years has yet joined the ranks of the world’s top 100 companies by market capitalization, compared with three in China and seven in the United States.

“SAP, established in 1972, was the last European entrant to the global top 100, and all top 100 European companies are more than 30 years old.”