The global economy faces a lost decade after the Covid-19 pandemic unless policymakers spurn austerity measures in favour of a comprehensive recovery plan built on investment in sustainable growth, the United Nations has said.
In its annual trade and development report, the UN’s economic arm said a repeat of the cost-cutting conducted by governments after the financial crisis of 2008-09 would choke off recovery and risk a double-dip recession in 2022.
The UN Conference on Trade and Development (Unctad) said that, despite a better than expected growth performance in recent months, the global economy was on course to shrink by 4% this year. The turnaround from the near-3% growth predicted before the pandemic struck would cost $6tn (£4.7tn) in lost output, it added, with international trade down by 20%, foreign direct investment dropping by 40% and remittances cut by more than $100bn.
While the biggest falls in growth rates would