The average unemployment rate among the world’s wealthy nations could reach 12.6 percent by the end of this year if a second coronavirus pandemic wave occurs, the Organization for Economic Cooperation and Development said Tuesday.
In its annual employment outlook report, the OECD predicted the jobless rate would more than double from 5.3 percent at the end of last year in the worst-case “double-hit” scenario, due to restrictions on economic activities, such as city lockdowns, to slow the virus spread.
The Paris-based club of 37 mostly wealthy countries said the pandemic is “turning into a jobs crisis far worse” than the 2008-2009 global financial crisis. The previous worst OECD-wide jobless rate of 8.66 percent was logged twice in October 2009 and January 2010.
Even in the case of the “single-hit” scenario, in which the virus continues to recede and remains under control, the organization’s projection showed that the jobless rate would be 9.4 percent.
As for next year, the OECD said the rate is expected to remain at or above the peak level observed during the financial crisis, standing at 8.9 percent in the double-hit scenario, and 7.7 percent in the single-hit scenario.
OECD Secretary General Angel Gurria said in the report that the COVID-19 crisis will “cast a long shadow” over the world and the economies of its members, including European countries, Australia, Japan and the United States.
“As many countries gradually move out of strict containment measures and the economy restarts, it is essential to sustain the recovery with a combination of macroeconomic policies and sectoral policies to boost growth and job creation while providing support to the many still in need,” Gurria said.
The report also said that hours worked in the first three months of the virus crisis, starting from January or February of this year, fell 12.2 percent, compared with a 1.2 percent fall in the initial three months of the financial crisis from October 2008.
In its separate biannual economic outlook report released in June, the OECD projected that the global economy will shrink 6.0 percent this year from 2019 in the single-hit scenario, and 7.6 percent in the double-hit scenario.
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