Developing countries and the international community can take steps now to speed recovery after the worst of the health crisis has passed and blunt long-term adverse effects, said the World Bank.
The organisation released analytical chapters of its Global Economic Prospects report on June 2, which said short term response measures to address the health emergency and secure public services will need to be accompanied by comprehensive policies to boost long-term growth.
The analysis has been released ahead of the June 8 issuance of the full report, which will include the Bank Group's latest forecasts for the global economy.
According to the analysis, "To make future economies more resilient, many countries will need systems that can build and retain more human and physical capital during the recovery – using policies that reflect and encourage the post-pandemic need for new types of jobs, businesses and governance systems."
"Deep recessions associated with the pandemic will likely to exacerbate the multi-decade slowdown in economic growth and productivity, the primary drivers of higher living standards and poverty reduction," notes the analysis.
The President of World Bank Group, David Malpass said, "Current estimates show that 60 million people could be pushed into extreme poverty in 2020."
"These estimates are likely to rise further, with the reopening of advanced economies the primary determinant," he added.
According to the analysis, measures needed to protect public health have undercut an already fragile global economy, causing deep recessions in advanced economies and emerging market and developing economies (EMDEs) alike.
"EMDEs that have weak health systems; those that rely heavily on global trade, tourism, or remittances from abroad; and those that depend on commodity exports will be particularly hard-hit," the analysis notes.
"In the long-term, the pandemic will leave lasting damage through multiple channels, including lower investment; erosion of physical and human capital due to closure of businesses and loss of schooling and jobs; and a retreat from global trade and supply linkages," it said.