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Covid-19 pandemic is 'worse economic shock' than 2007 crisis, says OECD

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Warning: Angel Gurria

Warning: Angel Gurria

Warning: Angel Gurria

The coronavirus pandemic will take years to recover from and has already caused a greater economic shock than the global financial crisis of 2007-09, the Organisation for Economic Co-operation and Development (OECD) has said.

As governments unveil trillions of dollars of spending to prevent millions of jobs disappearing, OECD secretary general Angel Gurria called on world leaders to “throw everything” at the Covid-19 crisis.

Stringent social distancing measures to keep people at home are essential to contain the virus, Mr Gurria said in a statement, but he warned that they are thrusting economies into an unprecedented “deep freeze” state, from which recovery will not be straightforward or automatic.

He cautioned that even the most severe economic scenarios imagined at the start of March were not pessimistic enough.

Speaking to the BBC, Mr Gurria said it was “wishful thinking” to hope that countries would rebound quickly from the pandemic.

He said: “And the reason is that we don’t know how much it’s going to take to fix the unemployment because we don’t know how many people are going to end up unemployed. We also don’t know how much it’s going to take to fix the hundreds of thousands of small and medium enterprises who are already suffering.”

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