The Great Lockdown Recession Is Here
The Great Lockdown Recession Is Here

In what comes as absolutely no surprise to the people who’ve been following this coronavirus crisis closely, the International Monetary Fund (IMF) shared its thoughts on the dire state of the world economy and the financial challenges that low-income countries will face in the coming months. “It is very likely that this year, the global […]

In what comes as absolutely no surprise to the people who’ve been following this coronavirus crisis closely, the International Monetary Fund (IMF) shared its thoughts on the dire state of the world economy and the financial challenges that low-income countries will face in the coming months.

 

“It is very likely that this year, the global economy will experience its worst recession since the Great Depression, surpassing that seen during the financial crisis a decade ago,” IMF Chief Economist Gita Gopinath wrote in the foreword for the fund’s World Economic Outlook.

 

The IMF’s latest report card titled the current state of the world as “The Great Lockdown” and described the coronavirus pandemic as a crisis “like no other” and stated that the world economic output is likely to shrink by three per cent this year. However, it is set to experience a partial rebound next year.

 

“There is extreme uncertainty around the global growth forecast. The economic fallout depends on factors that interact in ways that are hard to predict,” the Fund warned adding that under its best-case scenario, the world will likely lose $9 trillion in output over two years.

 

“For low-income countries, the challenges of this crisis are manifold,” said Gopinath at a videoconference briefing where she presented the report. “They have to deal with health crises with health systems that are just not as strong.”

 

“It is important to do whatever it takes and that includes cash transfers, digital payment systems to reach those working for daily wages,” Gopinath added.

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