New Delhi (NVI):  Possibly barring India and China, developing countries are expected to be in serious economic trouble as coronavirus is pushing the world into recession with a predicted loss of trillions of dollars, according to UN Conference on Trade and Development (UNCTAD).

The UNCTAD estimates a $2 trillion to $3 trillion financing gap facing developing countries over the next two years.

“The world economy will go into recession this year with a predicted loss of global income in the trillions of dollars. This will spell serious trouble for developing countries, with the likely exception of China and the possible exception of India,” the UNCTAD said in a report.

“The speed at which the economic shockwaves from the pandemic has hit developing countries is dramatic, even in comparison to the 2008 global financial crisis,” the global body said.

The United Nations has called for a US$2.5 trillion rescue package for developing countries countries (excluding China), which are facing an unprecedented economic damage from the COVID-19 crisis, to turn expressions of international solidarity into meaningful global action.

The report shows that in the two months since the virus began spreading beyond China, developing countries have taken an enormous hit in terms of capital outflows, growing bond spreads, currency depreciation and lost export earnings, including from falling commodity prices and declining tourist revenues.

Portfolio outflows from main emerging economies surged to $59 billion in a month between February and March, calculations show. This is more than double the outflows experienced by the same countries in the immediate aftermath of the global financial crisis ($26.7 billion).

The values of their currencies against the dollar have fallen between 5% and 25% since the beginning of this year – faster than the early months of the global financial crisis.

The prices of commodities, on which many developing countries heavily depend on their foreign exchange, have also dropped precipitously since the crisis began. The overall price decline has been 37% this year, according to the report.

“The economic fallout from the shock is ongoing and increasingly difficult to predict, but there are clear indications that things will get much worse for developing economies before they get better,” UNCTAD Secretary-General Mukhisa Kituyi said.

Advanced economies have promised to do ‘whatever it takes’ to stop their firms and households from taking a heavy loss of income,” said Richard Kozul-Wright, UNCTAD’s director of globalization and development strategies.

He added, “But if G20 leaders are to stick to their commitment of ‘a global response in the spirit of solidarity,’ there must be commensurate action for the six billion people living outside the core G20 economies.”

The death toll due to coronavirus outbreak has surged past 35,000 while the number of confirmed cases topped 750,000, globally, the report said.