The world’s economy is in a recession more severe than any global financial crisis since the Great Depression, says the International Monetary Fund.
The lending agency has revised its 2020 forecast, now seeing the global economy contracting about 3 percent this year, dropping about $2.7 trillion from last year’s $90-trillion output.
The 3-percent forecast far exceeds the 0.1-percent contraction the world experienced at the 2009 height of the Great Recession.
During that recession, 40 percent of countries still showed economic growth; this year, less than 10 percent will, the IMF has warned.
The IMF believes China will be among the few fortunate countries this year, posting 1.2 percent in growth, compared to the 6.1 percent the IMF had forecast three months ago.
The agency predicts the U.S. economy will contract 5.9 percent this year, against just 2.5 percent in the recession year 2009; Europe will fare worse, shrinking 7.5 percent this year; in 2009, it lost 4.5 percent.
Overall global trade will fall 11 percent in 2020, the IMF says, in part because of the unresolved U.S.-China trade war. That shrinkage will make it harder for countries to juice their economies by boosting exports.
The IMF expects a tepid rebound in 2021, shaping a world economy that will be about 4 percent smaller than the IMF was predicting in January.
Fiscal stimulus can help speed a recovery, the IMF’s statement noted, but only when the virus is tamed and people can return to normal activities.
TREND FORECAST: National economies will reopen in fits and starts. In the U.S., some state and local officials will yield to public or ideological pressure and lift lockdowns sooner; others will keep things closed at least until widespread testing is available.
The “Greatest Depression” is well under way. At best, bankster monetary and government fiscal stimulus will marginally and temporarily boost equity and economic growth.
