In the 1930’s in its latest forecast that the global economy will suffer its worst year since the Great Depression due to coronavirus and lockdowns that have shut down much of the world. In its biannual World Economic Attitude published on April 14, the global lender projected the world’s economy will contract by 3.1 percent this year returning in 2021 to 5.8 percent growth.
“It makes the big lockout the worst recession since the Great Depression, and much worse than the global financial crisis” in 2009, IMF chief economist Gita Gopinath said. The forecast reflects a sharp downward shift of almost 6 percent from the previous IMF global growth prediction of 3.3 percent released earlier this year before coronavirus spread. The severe economic predictions could be worse, cautioned the IMF, if lock downs continue for many quarters and renewed outbreaks occur later this or next year. “Much worse growth outcomes are possible and probably even inevitable,” the study warned, adding that there were many unknowns about how the pandemic and its economic consequences would take place
Lockdowns, industry shutdowns, social distancing and travel bans have disrupted the global economy, crippling commerce and contributing to millions of job losses. According to the IMF, world trade will plunge 11% this year and then rise 8.4% in 2021. In the meantime, neighboring Belarus is expected to see its economy decline by 6%, compared with last year’s growth of 1.2%1e place.
In Ukraine, which has reported modest growth in recent years since the economy dipped more than 16 percent in 2014-15 due to the conflict in the east of the country, it is predicted that the economy will plunge by 7.7 percent in 2020. Countries in south-east Europe are facing a range of negative growth estimates, from a 3% slump in Serbia to a 9% drop in Montenegro. The IMF forecasts growth in the Middle East and Central Asia will slip by 2.8 percent compared with such a modest gain of 1.2 percent last year. Then it will rise by 4 percent in 2021
Iran, where the second largest economy in the Middle East has been pummeled by a combination of sanctions and virus, is expected to reduce by 6 per cent in 2020 for its third consecutive contraction.
This shrank by 3.6 percent and 7.6 percent in 2018 and 2019, respectively. In Central Asia, Uzbekistan, Turkmenistan and Tajikistan are some of the few countries in the world that this year will experience moderate growth of between 1 and 1.8 per cent, the IMF said. Neighboring Kazakhstan and Kyrgyzstan respectively would shed 2.5 and 4 per cent, however. That is compared to last year’s growth of 4.5 per cent in each region. Meanwhile, this year’s Afghan and Pakistan economies will decline 3% and 1.5%, respectively, compared to last year.