The IMF, investment bank Morgan Stanley and the UN have all warned of the long-term impact Covid-19 is likely to have on emerging economies.
Alejandro Werner, writing for the IMF, says economic activity across Latin America is poised to contract by 5.2% in 2020 as a result of Covid-19.
“Given the dramatic contraction in 2020 and as countries implement polices to contain the pandemic and to support their economies a sharp recovery in 2021 can be expected. Yet, even under this quick recovery scenario, the region faces the specter of another ‘lost decade’ during 2015–25.”
Investment bank Morgan Stanley’s chief economic adviser Reza Maghadam has warned that emerging markets are: “already suffering from a sudden stop in capital flows and an unprecedented drop in export orders from the rest of the world.
“Emerging markets largely escaped the 2008 global crisis and recovered quickly. Let’s hope they prove as resilient this time, but a bumpy road definitely lies ahead.”
Meanwhile, secretary general of the UN Conference on Trade Development Dr. Mukhisa Kituyi has said Africa needs massive donor support to weather the Covid-19 crisis:”On the economic front, things could hardly be worse.
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“The top 5,000 multi-national enterprises in the world are revising down earnings estimates between -30 per cent and up to -200 per cent for this year.
“Loss of export earnings both through disruption of supply chains and lockdowns is projected to cost Africa upwards of $500 billion.”