WASHINGTON 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 said on Tuesday in its latest forecast. The IMF said that it expects the global economy to shrink 3 per cent this year — far worse than its 0.1pc dip in the Great Recession year of 2009 — before rebounding in 2021 with 5.8pc growth. It acknowledges, though, that prospects for a rebound next year are clouded by uncertainty. 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 organisation had forecast moderate global growth of 3.3pc this year. But farreaching measures to con tain the pandemic — lockdowns, business shutdowns, social distancing and travel restrictions — have suddenly brought economic activity to a nearstandstill 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.” Gopinath said the cumulative loss to the global gross domestic product, the broadest gauge of economic output, could amount to $9 trillion — more than the economies of Germany and Japan combined. The IMF’s twiceyearly World Economic Outlook was prepared for this week’s spring meetings of the 189-nation IMF and its sister lending organisation, the World Bank. Those meetings, along with a gathering of finance ministers and central bankers of the world’s 20 biggest economies, will be held virtually for the first time in light of the coronavirus outbreak. In its latest outlook, the IMF expects economic contractions this year of 5.9pc in the United States, 7.5pc in the 19 European countries that share the euro currency, 5.2pc in Japan and 6.5pc in the United Kingdom. China, where the pandemic originated, is expected to eke out 1.2pc growth this year. The world’s second-biggest economy, which had gone into lockdown, has begun to open up well before other countries. Worldwide trade will plummet 11pc this year, the IMF predicts, and then grow 8.4pc in 2021. Last week, the IMF’s managing director, Kristalina Georgieva, warned that the world was facing “the worst economic fallout since the Great Depression.” She said that emerging markets and low-income nations across Africa, Latin America and much of Asia were at especially high risk. And on Monday, the IMF approved $500 million to cancel six months of debt payments for 25 impoverished countries. — IMF
