The COVID-19 pandemic will significantly increase global unemployment, leaving up to 25 million more people out of work, and will dramatically slash workers’ incomes, UN Economic Commission for Western Asia warned Wednesday.
In a fresh study, the International Labour Organization warned that the arab nations’ gross domestic product (GDP) is expected to shrink by at least $42 billion in 2020, hit by plunging oil prices and virus-linked shutdowns, it said.
“More than 1.7 million jobs could be lost in 2020, with the unemployment rate increasing by 1.2 percentage points,” the report said.
The UN agency’s study suggested the world should prepare to see a “significant rise in unemployment and underemployment in the wake of the virus.”
Presenting different scenarios depending on how quickly and with what level of coordination governments react, it found that even in the best-case scenario, 5.3 million more people will be pushed into unemployment by the crisis.
At the high-end meanwhile, 24.7 million more people will become jobless, on top of the 188 million registered as unemployed in 2019, the study found.
“However, if we see an internationally coordinated policy response, as happened in the global financial crisis of 2008/9, then the impact on global unemployment could be significantly lower,” the ILO wrote on their website. By comparison, 22 million people lost their jobs in this crisis.
The COVID-19 pandemic has already put many businesses under pressure, with some governments pledging economic measures to prevent job losses.
Reductions in access to work will also mean “large income losses for workers,” ILO said.
“The study estimates these as being between $860 billion and $3.4 trillion by the end of 2020,” it said, warning that “this will translate into falls in consumption of goods and services, in turn affecting the prospects for businesses and economies.”
The number of people who live in poverty despite holding one or more jobs will also increase significantly, the study said, estimating that between 8.8 and 35 million more people will be added to the ranks of the working poor.
The coronavirus outbreak has killed 8,809 people and infected 218,631 across 157 countries and territories, according to a tracker maintained by Johns Hopkins University.