One of the world’s top finance officials has said the economic shock created across the world by the coronavirus epidemic is already bigger than the 2008 financial crisis or the September 11 terror attacks.
Secretary General of the Organisation for Economic Co-operation and Development (OECD) Angel Gurria said it was ‘wishful thinking’ that countries would bounce back quickly, claiming many if the world’s biggest economies would fall into recession in coming months.
He said: “Even if you don’t get a worldwide recession, you’re going to get either no growth or negative growth in many of the economies of the world, including some of the larger ones, and therefore you’re going to get not only low growth this year, but also it’s going to take longer to pick up in the in the future.”
Claiming the world ‘will take years to recover’ he said that while the overall number of job losses and company failures remains uncertain the world will be dealing with the consequences of the pandemic ‘for years to come’.
He added: “The reason is that we don’t know how much it’s going to take to fix the unemployment because we don’t know how many people are going to end up unemployed. We also don’t know how much it’s going to take to fix the hundreds of thousands of small and medium enterprises who are already suffering.”
Looking to the future the OECD set out a four pronged attack plan to beat the effects of the virus:
- Free virus testing
- Better equipment for doctors and nurses
- Cash transfers to workers, including the self-employed
- Tax payment holidays for businesses
Mr Gurria compared the work necessary to The Marshall Plan which helped pay for thye reconstruction of Europe after the Second World War.
Stress tests cancelled
IN a new development the Bank Of England has cancelled its stress tests for the UK banking industry for 2020.
The annual tests are designed to ensure the financial resilience of the banking system by posing a series of extreme scenarios to see if the industry could handle them.
A spokesman said: “The decision to cancel the 2020 stress test for the eight major UK banks and building societies is intended to help lenders focus on meeting the needs of UK households and businesses via the continuing provision of credit.
“The recent 2019 stress test showed that the UK banking system was resilient to deep simultaneous recessions in the UK and global economies that are more severe overall than the global financial crisis, combined with large falls in asset prices and a separate stress of misconduct costs.”