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Falling economies

"The government should not ignore the call of workers to reclaim their jobs."

The global coronavirus pandemic has sparked an economic "crisis like no other," said the International Monetary Fund last month. That assessment may be cautiously optimistic when ranged against the actual economic performance of major industrialized nations in the second quarter.

Major economies are about to report their gross domestic product results in the April-June period, and many analysts are already conditioning themselves to disastrous performances. The Philippines, too, is expecting the worst after virtually shutting down the economy from March to May through a series of lockdown measures that disrupted the supply chain and rendered many workers jobless.

The United States, the world's biggest economy, will release second-quarter data anytime soon confirming that the coronavirus pandemic resulted in a historic plunge of 35 percent in the GDP and in a high number of unemployment filings.

Closer to home, Singapore sank into recession in the second quarter after growth dropped 41.2 percent quarter-on-quarter. Its economy slumped 12.6 percent year-on-year, an unprecedented development. The second-quarter results put the city state in recession for the first time in 10 years.

The IMF has predicted the world GDP will decline 4.9 percent this year and wipe out $12 trillion over two years. Global business closures meant hundreds of millions of jobs were lost.

The slightest global economic contraction is disastrous, especially for low-income countries and households. The IMF has warned that a lower GDP output lessens job opportunities and endangers the progress made on reducing extreme poverty.

Here in the Philippines, economic managers are hoping the nation already experienced the worst of the COVID-19 pandemic in the second quarter.

But local private economists believe the local GDP contraction could be deeper in the second quarter, considering that the lockdown imposed by the government to contain the spread of the disease almost covered the entire April-to-June period.

Reopening the economy further, thus, is a must if the administration wants to preserve the recent gains it achieved. The government should not ignore the call of workers to reclaim their jobs.

Topics: Editorial , Falling economies , coronavirus pandemic , International Monetary Fund , economy , GDP
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