If a plan isn’t implemented, a massive global recession will be imminent.
The International Monetary Fund, a global organization that works to ensure the stability of the global economy, has posted a forecast showing anything but. According to the IMF’s report, should global policymakers fail to coordinate a plan of action for the post-pandemic fallout, a recession could occur the likes of which has not been seen since The Great Depression of the 1930s. This hypothetical recession could extend as far as into next year.
To get into specifics, the IMF is predicting a GDP contraction of approximately 3%, an even more dire drop than 2008’s recession. Coincidentally, it’s almost the exact opposite of what was predicted at the beginning of 2020; in January, before the COVID-19 pandemic began, the IMF was predicting a 3.3% growth in GDP.
“The Great Lockdown, as one might call it, is projected to shrink global growth dramatically. A partial recovery is projected for 2021 … but the level of GDP will remain below the pre-virus trend, with considerable uncertainty about the strength of the rebound,” an IMF representative told CNN. “Much worse growth outcomes are possible and maybe even likely,” it added.
The IMF has warned that the world could be in for a bona-fide economic crisis. Even once the pandemic has been contained, the efforts to do so will cost millions of workers their jobs and cause tens of thousands of businesses to shutter. The United States has already received a preview of this future, and according to the IMF’s estimates, it’s only going to get worse, with unemployment increasing to 10.4%.
Based on the IMF’s math, should this massive recession come to pass, the global economy will manage a rebound some time in 2021, with a possible GDP growth of 5.8%. This is assuming, however, that the coronavirus is successfully contained within the second half of 2020.