The world economy, already 'sluggish' before the coronavirus outbreak, is now bound to suffer a 'severe recession' in 2020 IMF shared it's views. According to International Monetory Fund (IMF) the current crisis emerged due to Covid19 posed 'daunting challenges' for policymakers in many emerging markets and developing economies, this will make Global economies suffer a severe recession IMF chief Kristalina Georgieva has said. The whole world is going through bad times and all the economies are going to suffer and a lot of changes will be seen once this pandemic ends. Global economies may likely face situation worse scenario than 1930s, predicted IMF.
The trade is restricted, business operations are on a standstill, unemployment is all time high, industries are debt-ridden and the banks are suffering. IMF Managing Director said that the coronavirus pandemic may hit the world economy when it was already in a fragile state as it was weighed down by trade disputes, policy uncertainty and geopolitical tensions.
Among IMF's views in Global economies medium-term projections are clouded by uncertainty regarding the pandemic's magnitude and speed of propagation, as well as the longer-term impact of measures to contain the outbreak, such as travel bans and social distancing, IMF MD said. The number of coronavirus cases are achieving a new height each day making the government to take more stringent steps and thus putting a halt on operations.
There is extreme uncertainty around the global growth forecast but we know the global economy will be in recession in 2020, with markdowns on the projections expected across regions and countries. See the numbers in the #IMFBlog #WEO https://t.co/5rJQbhTmkm pic.twitter.com/9v5nO6ExjZ— IMF (@IMFNews) April 14, 2020
Countries that were affected early-such as China, South Korea, and Italy-have suffered large contractions in manufacturing activity and services, exceeding the losses recorded at the onset of the global financial crisis, Georgieva said. Oil prices have fallen sharply, power sector is in a crisis and entire economy is in a grave situation.
A large global contraction in the first half of 2020 is inevitable. Prospects thereafter depend on the intensity and efficacy of containment efforts, progress with developing vaccines and therapies, the extent of supply disruptions, shifts in spending patterns, the impact of tighter financial conditions on activity, and the size of the policy response, Georgieva said.