Representatives for the International Monetary Fund say they expect the global economy to shrink three per cent in 2020, its worst year since the Great Depression of the 1930s.
Beaten down by the coronavirus outbreak, the world economy in 2020 will suffer its worst year since the Great Depression of the 1930s, the International Monetary Fund says in its latest forecast.
The IMF said Tuesday that it expects the global economy to shrink three per cent this year — far worse than its 0.1 per cent dip in the Great Recession year of 2009 — before rebounding in 2021 with 5.8 per cent growth. It acknowledges, though, that prospects for a rebound next year are clouded by uncertainty.
The outlook for Canada calls for a contraction of 6.2 per cent this year followed by growth of 4.2 per cent in 2021.
The bleak assessment represents a breathtaking downgrade by the IMF. In its previous forecast in January, before COVID-19 emerged as a grave threat to public health and economic growth worldwide, the international lending organization had forecast moderate global growth of 3.3 per cent this year. But far-reaching measures to contain the pandemic — lockdowns, business shutdowns, social distancing and travel restrictions — have suddenly brought economic activity to a near-standstill across much of the world.
“The world has been put in a great lockdown,” the IMF’s chief economist, Gita Gopinath, told reporters. “This is a crisis like no other.”
Watch Gopinath speaking to reporters in the video below:
‘This is a crisis like no other,’ says Gita Gopinath, noting that there is a huge amount of uncertainty about where economies are headed. 1:08
Gopinath said the cumulative loss to the global gross domestic product, the broadest gauge of economic output, could