IMF Predicts Global Economy Will See ‘Worst Recession Since Great Depression’ Due to Coronavirus

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The closing numbers on the floor of the New York Stock Exchange in New York City, March 9, 2020. (Bryan R Smith/Reuters)

The International Monetary Fund on Tuesday predicted the global economy will see the deepest recession since the Great Depression due to the coronavirus pandemic.

The IMF has projected that the global economy will shrink by 3 percent in terms of GDP. By comparison, during the Great Recession of 2008-2009 the global economy shrank by 0.075 percent, while global GDP fell by 15 percent from 1929 to 1932.

“It is very likely that this year the global economy will experience its worst recession since the Great Depression, surpassing that seen during the global financial crisis a decade ago,” IMF chief economist Gita Gopinath said. “The great lockdown, as one might call it, is projected to shrink global growth dramatically.”

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Less than 10 percent of world nations will see per-capita growth of their economies, compared to 40 percent in the Great Recession, the IMF predicted. Meanwhile, the American economy will shrink by 5.9 percent over the course of 2020, compared to the 4.2 percent contraction from 2007 to 2009.

“Like in a war or a political crisis, there is continued severe uncertainty about the duration and intensity of the shock,” Gopinath added.

With many world nations currently implementing lockdowns or mandatory business closures, it remains unclear which segments of the world economy can be reopened, and for how long, before new coronavirus outbreaks appear. Within the U.S., over 16 million Americans have filed for unemployment since the start of the pandemic, while Congress passed a $2.2 trillion economic relief package to cushion the fallout from business closures.

“When the spread of the virus is under control, businesses will reopen, and people will come back to work. There is every reason to believe that the economic rebound, when it comes, can be robust,” Federal Reserve chairman Jerome Powell said last week. However, Powell warned of a “false start” if state governors open nonessential businesses too soon, which may lead to new coronavirus clusters.

Zachary Evans is a news writer for National Review Online. He is a veteran of the Israeli Defense Forces and a trained violist.

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