The Internationa Monetary Fund (IMF) has noted that the Coronavirus (COVID-19) pandemic has pushed the world into an unprecedented recession that may trigger worst economic fallout since the 1930s Great Depression, with only a partial recovery in 2021.
“Just three months ago, we expected positive per capita income growth in over 160 of our member countries in 2020,” IMF Managing Director Kristalina Georgieva said.”Today, that number has been turned on its head: we now project that over 170 countries will experience negative per capita income growth this year.”
“With each passing day, the 2008 global financial crisis is increasingly looking like a mere dry run for today’s catastrophe. The short term collapse in global output now underway already seems to rival or exceed that of any crisis recession in the last 150 years,”
The IMF has hence urged for a globally coordinated health and economic policy effort, notes IMF.
The Fund predicts that with the economic damage growing across all it’s 189 member countries and disruptions caused by the virus starting to ripple through emerging markets, the 2020 recession will also be worse than the 2008 global financial crisis.
WTO has also warned that trade slumps caused by the coronavirus pandemic were likely to exceed the 2008 global financial crisis with world trade expected to fall by between 13pc and 32pc this year as the pandemic disrupts every aspect of the global economy.
“The immediate goal is to bring the pandemic under control and mitigate the economic damage to people, companies and countries. But policy makers must start planning for the aftermath of the pandemic.”
But on a positive note, IMF says China, the first country to experience the full force of the disease with confirmed active cases at over 60,000 by mid-February, is seeing a modest improvement in its PMI after sharp declines early in the year, despite weak external demand.
According to IMF, satellite data shows recent increase in nitrogen dioxide concentration over China in March, suggesting a pick-up of industrial and transport activities’.
The recovery in China, albeit limited, is encouraging, suggesting that containment measures could succeed in controlling the epidemic and pave the way for a resumption of economic activity.
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