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The Great Lockdown to be worst recession since Great Depression

The International Monetary Fund said Tuesday that the novel coronavirus will likely push the global economy into its worst recession since the Great Depression, warning that prospects over a global rebound are highly uncertain.

In its biannual World Economic Outlook, the IMF forecasts the global economy contracting by 3% in 2020 (Much Lower Than the WORLD BANK Numbers) as governments around the world shut down economies to contain the spread of the coronavirus. The forecast is the worst print in the report’s history and is a dramatic downturn from the IMF’s January projection for 3.3% growth, published before the virus took full form.

An unprecedented amount of countries are now asking for emergency aid. IMF chief economist Gita Gopinath told Yahoo Finance that about 100 of the IMF’s 189 member countries have asked for help in the last four weeks.

“It’s a truly global crisis and we’re seeing a very large number of countries in distress,” Gopinath said.

Among the regions projected to see the hardest hit in 2020: the Euro Area at -7.5%, Mexico at -6.6%, the United Kingdom at -6.5%, and the United States at -5.9%. China is projected to grow by 1.2%, still a noticeable downgrade from its 2019 growth rate of 6.1%.

Gopinath told Yahoo Finance that if the pandemic is not contained through 2021, the world could see a contraction of 6% in 2020 with “almost no recovery” in 2021.

Yahoo Finance - Brian Cheung

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