The global economy will this year likely suffer the worst financial crisis since the Great Depression, the International Monetary Fund (IMF) said in a report on Tuesday, as the world grapples with coronavirus pandemic.
The Washington-based organization now expects the global economy to contract by 3 percent in 2020. By contrast, in January it had forecast a global GDP (gross domestic product) expansion of 3.3 percent for this year.
“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,” Gita Gopinath, the IMF’s chief economist, said in the latest World Economic Outlook report.
In January, the IMF had estimated 3.4 percent growth for global GDP in 2021; this has now been revised up to 5.8 percent (although growth is expected to be coming from a lower base following 2020′s projected contraction).
IMF: Euro zone to be hit the hardest
The latest forecasts from the IMF suggest that the U.S. economy will contract by 5.9 percent this year. In comparison, the euro zone is expected to shrink by 7.5 percent , but China is seen growing by 1.2 percent in 2020.
The economic situation will be particularly difficult in Italy and Spain, where GDP is set to contract by 9.1 percent and 8 percent , respectively.
