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Countries issued USD 12 trillion in 2020 to overcome the economic effects of Covid-19

To stop the devastating economic effects that the coronavirus has generated in the world, countries have had to design fiscal stimulus packages, which has represented an emission of 12.7 trillion dollars .

This statement is derived from the Report on the Situation and Outlook of the World Economy in 2021, prepared by the United Nations (UN).

The 198-page document indicates that the pandemic spread like a forest fire in 2020, reaching all corners in the world to infect more than 90 million people and caused the death of about 2 million individuals.

It highlights that “governments from around the world responded quickly and boldly to avoid economic contagion from the crisis. The fiscal and monetary stimulus packages were rolled out quickly to save the economy. ”

The text points out that, although central banks worldwide have been successful in the massive injection of liquidity and in keeping long-term interest rates low, have been less successful in meeting their inflation targets.

The report highlights that the environment of excessive liquidity and low inflation has allowed financial markets to take risks and create a massive financial bubble, which can exacerbate financial instability.

The largest increase in public debt since World War II

According to the UN, most of the excess liquidity was used for the acquisition of financial assets and not for fixed investments that are critical to creating jobs and driving green growth onomic.

«In the context of a violent pandemic, the world is witnessing the accumulation of a financial bubble with the main stock market indices registering record rises in the last 10 months. The S&P 500 index, for example, increased almost 40% compared to the average annual increases of 10% in the last five years, “said the international organization.

The brief also indicates that finances and public debt face unprecedented risks. He comments that, along with the growing fiscal deficit, total public debt worldwide rose to $ 9.9 trillion in 2020. «This is the largest increase in public debt after the Second World War “, it reads.

Later the UN publication refers to the crisis that is worsening poverty and inequality. Predicted situation will increase to 131 million people living in lean conditions. It estimates that 797 million people will be trapped in extreme poverty until the year 2030, which represents a rate of more of 9% globally, which means that the Sustainable Development Goals of eradicating extreme poverty will be lost in nine years.

He adds that, in 2020, the world economy will it sank 4.3%, about 2.5 times more than during the 2009 global crisis. The humble recovery forecast for 2021 of 4.7% will barely offset the losses in 2020.

Regarding the outlook for world trade, it is expected to stand at 6.9% in 2021 and 3.7% in 2022, driven by international travel. However, the UN believes that the global trade outlook will be clouded by significant uncertainties, including the future spread of the virus ; lasting damage from the crisis, for example, labor markets and persistent tensions between the world’s major trading partners.

Fragile economic recovery in Latin America

Finally, the document warns that both Latin America and The Caribbean will have to face a fragile and irregular recovery due to the long-term consequences caused by the coronavirus in the economies of the region.

The UN says that the pandemic has destroyed Latin American and Caribbean countries, with a significant cost of human lives and an economic recession of historic proportions. Regional GDP decreased by around 8% in 2020 due to the prolongation of the national confinement measures, the decrease in merchandise exports and the collapse of economic activities caused by the decline in the tourism sector.

We are facing the worst economic and health crisis in the last 90 years. Source: Dutch Ministry of Foreign Affairs / wikipedia.org.

We are facing the worst economic and health crisis in the last 90 years. As we mourn the growing death toll, we must also remember that the decisions we make now will determine the future for all. We must invest in a sustainable and inclusive future driven by smart policy, meaningful investments, and an effective and strong multilateral system that puts people at the center of socioeconomic efforts.

António Guterres, Secretary-General of the United Nations.

Consolidation of bitcoin against the weakness of the dollar

Daniel Kim, consultant on cryptocurrencies and protagonist of the documentary called «Safe Mode of healthy money »he portrayed in April 2020, how the economic consequences of the pandemic will affect the world in the coming years.

Faced with this new scenario in which the dollar loses value, Kim believes that the time has come for citizens to seek new independent sources of scarcity, such as bitcoin and other cryptocurrencies.

In the perspective of this consultant, since the world is affected by the coronavirus pandemic, governments are showing that they can print as much money as they see fit without anything stopping them.

This monetary impression and high public spending would generate hyperinflation, as predicted by the book « Monetary Regimes and Inflation “, which Kim recommends. There, a study is made of 29 historical cases of hyperinflation in the world, as reported by CriptoNoticias in September 2020.

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Sandra Loyd
Sandra Loyd
Sandra is the Reporter working for World Weekly News. She loves to learn about the latest news from all around the world and share it with our readers.

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