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United Nations, Apr 2: The global economy could shrink by up to one per cent in 2020 due to the coronavirus pandemic, a reversal from the previous forecast of 2.5 per cent growth, the UN has said, warning that it may contract even further if restrictions on the economic activities are extended without adequate fiscal responses.

The analysis by the UN Department of Economic and Social Affairs (DESA) said the COVID-19 pandemic is disrupting global supply chains and international trade. With nearly 100 countries closing national borders during the past month, the movement of people and tourism flows have come to a screeching halt.

"Millions of workers in these countries are facing the bleak prospect of losing their jobs. Governments are considering and rolling out large stimulus packages to avert a sharp downturn of their economies which could potentially plunge the global economy into a deep recession. In the worst-case scenario, the world economy could contract by 0.9 per cent in 2020," the DESA said, adding that the world economy had contracted by 1.7 per cent during the global financial crisis in 2009.

It added that the contraction could be even higher if governments fail to provide income support and help boost consumer spending.

The analysis noted that before the outbreak of the COVID-19, world output was expected to expand at a modest pace of 2.5 per cent in 2020, as reported in the World Economic Situation and Prospects 2020.

Taking into account rapidly changing economic conditions, the UN DESA's World Economic Forecasting Model has estimated best and worst-case scenarios for global growth in 2020.

In the best-case scenario with moderate declines in private consumption, investment and exports and offsetting increases in government spending in the G-7 countries and China global growth would fall to 1.2 per cent in 2020.

"In the worst-case scenario, the global output would contract by 0.9 per cent instead of growing by 2.5 per cent in 2020," it said, adding that the scenario is based on demand-side shocks of different magnitudes to China, Japan, South Korea, the US and the EU, as well as an oil price decline of 50 per cent against our baseline of USD 61 per barrel.

The severity of the economic impact will largely depend on two factors - the duration of restrictions on the movement of people and economic activities in major economies; and the actual size and efficacy of fiscal responses to the crisis.

A well-designed fiscal stimulus package, prioritising health spending to contain the spread of the virus and providing income support to households most affected by the pandemic would help to minimise the likelihood of a deep economic recession, it said.

According to the forecast, lockdowns in Europe and North America are hitting the service sector hard, particularly industries that involve physical interactions such as retail trade, leisure and hospitality, recreation and transportation services. Collectively, such industries account for more than a quarter of all jobs in these economies.

The DESA said as businesses lose revenue, unemployment is likely to increase sharply, transforming a supply-side shock to a wider demand-side shock for the economy.

Against this backdrop, the UN-DESA is joining a chorus of voices across the UN system calling for well-designed fiscal stimulus packages which prioritize health spending and support households most affected by the pandemic.

Urgent and bold policy measures are needed, not only to contain the pandemic and save lives, but also to protect the most vulnerable in our societies from economic ruin and to sustain economic growth and financial stability, Under-Secretary-General for Economic and Social Affairs Liu Zhenmin said.

The analysis also warns that the adverse effects of prolonged economic restrictions in developed economies will soon spill over to developing countries via trade and investment channels.

A sharp decline in consumer spending in the European Union and the United States will reduce imports of consumer goods from developing countries.

Developing countries, particularly those dependent on tourism and commodity exports, face heightened economic risks. Global manufacturing production could contract significantly, and the plummeting number of travellers is likely to hurt the tourism sector in small island developing States, which employs millions of low-skilled workers, it said.

Meanwhile, the decline in commodity-related revenues and a reversal of capital flows are increasing the likelihood of debt distress for many nations. Governments may be forced to curtail public expenditure at a time when they need to ramp up spending to contain the pandemic and support consumption and investment.

UN Chief Economist and Assistant Secretary-General for Economic Development Elliot Harris said the collective goal must be a resilient recovery which puts the planet back on a sustainable track. We must not lose sight how it is affecting the most vulnerable population and what that means for sustainable development, he said.

The alarms raised by UN-DESA echo another report, released on March 31, in which UN experts issued a broad appeal for a large-scale, coordinated, comprehensive multilateral response amounting to at least 10 per cent of global gross domestic product (GDP).

According to estimates by the Johns Hopkins University, confirmed coronavirus cases across the world now stand at over 932,600 and over 42,000 deaths.

Munich, Feb 16: Iran's foreign minister said Saturday that US President Donald Trump is receiving bad advice if he believes an American "maximum pressure" campaign against his country will cause the government in Tehran to collapse.

Foreign Minister Mohammad Javad Zarif told a group of top defense officials and diplomats at the Munich Security Conference that the information provided to the president has dissuaded Trump from accepting offers from other leaders to mediate between Washington and Tehran.

"President Trump has been convinced that we are about to collapse so he doesn't want to talk to a collapsing regime," Zarif said.

To support his argument, the Iranian minister cited Trump's decision to pull out unilaterally in 2018 from Iran's nuclear deal with the US and other world powers. Trump said the landmark 2015 accord didn't address Iran's ballistic missile program or regional activities and needed to be renegotiated.

Since then, the Trump administration's re-imposition of US sanctions in a campaign of so-called "maximum pressure" have taken a severe toll on the Iranian economy and sent Iran's currency plunging.

"I believe President Trump, unfortunately, does not have good advisers," Zarif said. "He's been wanting for Iran to collapse since he withdrew from the nuclear deal." Zarif also said the killing of Iranian Gen. Qassem Soleimani in a US drone strike in Iraq on January 3 was a miscalculation by Washington that has galvanized support for Iran instead of increasing pressure on the regime.

The Iran nuclear deal, known as the Joint Comprehensive Plan of Action or JCPOA, promised Iran economic incentives in exchange for curbs on its nuclear program. It was intended to prevent Tehran from developing a nuclear bomb, which Iran insists it does not want to do.

Since the US withdrawal, the deal's other signatories - Germany, France, Britain, Russia and China - have unsuccessfully struggled to come up with ways to offset the effects of the new American sanctions.

Washington has pressured the other countries - so far without success - to abandon the deal entirely US Secretary of State Mike Pompeo said at the Munich Security Conference earlier Saturday that while there may be disagreements on what to do with the JCPOA, "when I talk to my counterparts here in Europe, everybody gets it."

"Everyone understands that these are folks who continue to build out their nuclear program," Pompeo said. "So there's a common understanding about the threat; we have tactical differences on how to proceed."

In recent months, Iran has steadily violated the limitations the deal placed on the amount of enriched uranium and heavy water it can stockpile, the number and type of centrifuges it can operate, and the purity of the uranium it enriches.

Iranian officials insist the moves are intended only to put pressure on the countries that remain part of the deal to provide economic help to Iran and that all the measures taken are fully reversible.

Zarif rejected Trump's suggestion of negotiating a new deal, saying the one negotiated during the Obama administration was the only vehicle for talks on Iran's nuclear program.

"There is no point in talking over something you already talked about. You don't buy a horse twice," he said.

"It's not about opening talks with the United States. It's about bringing the United States to the negotiating table that's already there," Zarif said.

Washington, Jun 12: US President Donald Trump is considering suspending a number of employment visas including the H-1B, most sought-after among Indian IT professionals, in view of the massive unemployment in America due to the coronavirus pandemic, according to a media report.

The proposed suspension could extend into the government’s new fiscal year beginning October 1, when many new visas are issued, The Wall Street Journal reported on Thursday, quoting unnamed administration officials.

“That could bar any new H-1B holder outside the country from coming to work until the suspension is lifted, though visa holders already in the country are unlikely to be affected,” the daily reported.

H-1B is the most coveted foreign work visas for technology professionals from India.

Such a decision by the Trump administration is likely to have an adverse impact on thousands of Indian IT professionals. Already a large number of Indians on the H-1B visas have lost their jobs and are headed back home during the coronavirus pandemic.

The White House, however, said that no final decision has been made and the administration is considering various proposals.

“The administration is currently evaluating a wide range of options, formulated by career experts, to protect American workers and job seekers especially disadvantaged and underserved citizens — but no decisions of any kind have been made,” White House spokesman Hogan Gidley said in a statement.

In addition to the H-1B visas, the suspension could apply to the H-2B visa for short-term seasonal workers, the J-1 visa for short-term workers including camp counselors and au pairs and the L-1 visa for internal company transfers, the financial daily reported.

Meanwhile, the US Chambers of Commerce CEO Thomas Donohue on Thursday wrote a letter to Trump, expressing concern over his reported move on temporary work visas.

“As the economy rebounds, American businesses will need assurances that they can meet all their workforce needs. To that end, it is crucial that they have access to talent both domestically and from around the world,” Donohue wrote in a letter to Trump.

According to The Hill newspaper, Donohue said that American businesses need L-1 visa holders, who have a work visa valid for a relatively short amount of time, for necessary expertise.

He noted the importance of H-1B visa holders, who have a work visa valid for multiple years, for various industries, including technology, accounting and manufacturers, the newspaper said.

“Policies that would, for example, impose wide-ranging bans on the entry of nonimmigrant workers or impose burdensome new regulatory requirements on businesses that employ foreign nationals would undermine that access to talent and in the process, undercut our economy’s ability to grow and create jobs,” Donohue added.