GENEVA — Officials with the World Bank announced that the dramatic decline in economic activity seen in the first quarter of 2020 is “likely” the result of people simply making less money.
“It’s true, people aren’t earning as much this quarter as they were last quarter,” Lars Grunwald, CEO of the global financial institution, said.
“We’re fairly certain that is the reason for the overall decline in the global economy,” he added. “We haven’t yet obtained all the data yet, but that’s the way it’s looking.
“During normal economic times, you know, people earn more. That’s just true,” Grunwald said. “We have a wealth of data proving that. More money made equals higher incomes and of course more economic activity.
“But in times of greatly reduced economic flow, then that’s got to be due to the fact that people just aren’t bringing home as much money. It just seems to make the most sense, but again, we don’t want to get in front of ourselves here and put out incorrect data, since so many people are depending on us to be right,” Grunwald continued.
Asked if he thought that once people started earning more again, it would likely lead to greater economic activity, Grunwald said it’s “certainly possible.”
“We just don’t have all the answers yet,” he noted.