The International Monetary Fund thinks the world is facing the worst recession since the Great Depression.
It's predicting the global economy will shrink by 3% this year. The Eurozone area will see its economy contract by 7.5%.
Overall 9 trillion dollars could be wiped off the value of GDP globally over the next two years because of the pandemic.
Their information is based on the assumption the pandemic fades in the second half of 2020 and containment efforts can be gradually unwound.
However, the global financial body is forecasting growth of 5.8% in 2021, as economic activity normalises helped by policy support.
For the first time since the #GreatDepression both advanced economies and emerging market and developing economies are in recession” said @GitaGopinah at the release of the latest World Economic Outlook #WEO https://t.co/93xXDRsg3B pic.twitter.com/3PmqaVCboH
— IMF (@IMFNews) April 14, 2020
Chief economist Gita Gopinath says the Covid-19 pandemic means the world economy has changed “dramatically” since January, creating a crisis “like no other”.
''First, the shock is large. The output loss associated with this health emergency and related containment measures likely dwarfs the losses that triggered the global financial crisis.
Second, like in a war or a political crisis, there is continued severe uncertainty about the duration and intensity of the shock.
Third, under current circumstances there is a very different role for economic policy. In normal crises, policymakers try to encourage economic activity by stimulating aggregate demand as quickly as possible. This time, the crisis is to a large extent the consequence of needed containment measures. This makes stimulating activity more challenging and, at least for the most affected sectors, undesirable.''
The cumulative loss to global GDP over 2020 and 2021 from the pandemic crisis could be around $9 trillion, greater than the economies of Japan and Germany combined. Read the #IMFBlog on the latest #WEO. https://t.co/5rJQbhTmkm pic.twitter.com/PT0ah9FJiE
— IMF (@IMFNews) April 14, 2020
