IMF: Coronavirus pandemic pushing global economy into deepest recession

As dely coronavirus pandemic has affected 210 countries and territories around world, International Monetary Fund, on April 15, said that outbreak is also pushing global ecomy into its deepest recession. While speaking to international media reporters, IMF chief ecomist Gita Gopinath warned that that pandemic has alrey cut world output by three per cent this year and it could get worse. She also informed that downturn will slash $9 trillion from world ecomy. 

While virus has led to unemployment in several sectors and also led to shutting down of global ecomy, IMF reportedly said that even if it is contained and ecomies begin operating again, 2021 should see a rebound of 5.8 per cent. However, organisation also said that it is still difficult to make an accurate prediction due to changing situation. Furr, IMF also warned that re are ‘severe risks of a worse outcome’ due to ‘extreme uncertainty around strength of recovery. 

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‘ Great Lockdown’ 

Gopinath reportedly said that cumulative loss of global GDP over 2020 and 2021 from pandemic crisis could be around $9 trillion, which is greater than ecomies of Japan and Germany combined. She ded that ‘much worse’ growth outcomes are possible and maybe even likely if pandemic and containment measures last longer or if widespre scarring effects emerge due to firm closures and extended unemployment. IMF also situation ‘ Great Lockdown’ and informed that global downturn is worst since Great Depression of 1930s. 

Furrmore, organisation predicted that this year, only ecomies that are expected to be spared from recession are China and India, however, y ded that even those countries will only see relatively low growth of 1.2 per cent and 1.9 per cent respectively. organisation also predicted that vanced ecomies could be shrunk by six per cent in 2020. IMF projects that US ecomy could contract by 5.9 per cent and drops of 7.3 per cent in France and 6.5 per cent in Britain is also predicted. 

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IMF reportedly said that severe slowdown is ‘unavoidable’, however, y ded that substantial targeted fiscal, monetary and financial measure can soften blow. Gopinath also said that once recovery happens and world is past pandemic phase for vanced ecomies, it would be essential to undertake a bro-based final stimulus. She ded that spending would be more effective if it were coordinated across all vanced ecomies of world. 

It is believed that synchronised actions can magnify impact but also can avoid some errors of past century when countries opted ‘futile mercantilist policies’. organisation has predicted that inevitable massive spending will le to a sharp increase in government debt and deficit levels. However, Gopinath reportedly said that if recovery begins in 2021 and with low-interest rates, combination should help in bringing down debt levels slowly over time. 

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