(Yicai Global) Sept. 23 --- China’s successful response to the pandemic makes it one of the few economies not expected to shrink and its growth will be very swift next year, according to a report the United Nations Trade and Development Commission released yesterday, which warned the rest of the world faces a double-dip recession in 2022, and possibly even a “lost decade.”

The global economy will contract by an estimated 4.3 per cent this year, leaving global output by year's end over USD6 trillion short of economists’ expectations before Covid-19 began its inexorable spread.

As individual domestic activity contracts, so goes the international economy; trade will shrink by around one-fifth this year, foreign direct investment flows will dry up by up to 40 percent, and cross-border remittances will drop by over USD100 billion, per the report.

“Data for the first two quarters of this year show output contracted more sharply than in 2008-2009, and in some cases registering the steepest drop on record. Estimates for the year point to a generalized global recession matching the Great Depression of the 1930s,” the report advises.

The largest falls in output will be in developed nations, with some likely to log double-digit declines, but the greatest economic and social damage will be “in the developing countries where the ability to respond to the crisis, on both the health and economic fronts, has been hampered by years of austerity combined with massive debt servicing, high levels of informality and policy space constricted by the rules we've chosen to manage globalization,” the report notes, adding the developing world also relies heavily on a few commodities or tourism as a source of foreign exchange and fiscal and policy space is limited.

Any recovery will likely fizzle out next year, with a double-dip recession then a real possibility in many countries in 2022,UNCTAD projected in the report.

The contrast is stark with East Asia, where growth will stay positive, albeit much lower than in last year -- China, for example, is expected to grow at 1.3 percent.

UNCTAD forecasts 1 percent expansion in the region this year, followed by 7.4 percent growth next year.

Editor: Ben Armour