The United Nations forecast that the COVID-19 pandemic will shrink the world economy by 3.2% this year, the sharpest contraction since the Great Depression in the 1930s.

The U.N.’s mid-year report said the impact of the coronavirus crisis is expected to slash global economic output by nearly USD 8.5 trillion over the next two years, wiping out nearly all gains of the last four years.

In January, before COVID-19 became a pandemic, the U.N. had forecast a modest acceleration in growth of 2.5% in 2020.

But U.N. chief economist Elliott Harris told a news conference launching the report that the global economic outlook “has changed drastically” since then, with the pandemic’s death toll climbing toward 300 000.

“With the large-scale restrictions of economic activities and heightened uncertainties, the global economy has come to a virtual standstill in the second quarter of 2020”, - he said. - We are now facing the grim reality of a severe recession of a magnitude not seen since the Great Depression”.