IMF Slashes Global Growth Forecast, Predicts Worst Recession Since 1930s

Kevin Mwanza
Written by Kevin Mwanza
growth forecast
The IMF has slashed its global growth forecast and predicts the worst recession since the 1930s due to the global coronavirus crisis. Chief Economist and Director of Research Department at the IMF Gita Gopinath speaks during a news conference at the World Bank/IMF Spring Meetings, in Washington, Tuesday, April 9, 2019. Image: AP Photo/Jose Luis Magana

The “great lockdown” depression due to the coronavirus pandemic will hurt the global economy more than the Great Depression did, according to the International Monetary Fund (IMF).

The Washington-based multinational lender cut back its global economic growth prediction for 2020 to a decline of 3 percent from a previous forecast of a 3.3 percent expansion. The IMF expects a “partial recovery” of 5.8 percent growth in 2021 provided countries reopen in the second half of 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.

The IMF monitors the financial and economic policies of its member governments around the world. Of the 189 IMF members, 54 are in Africa.

The lockdown as a result of the coronavirus pandemic has caused unprecedented shockwaves across the globe and led to a dramatic drop in economic activity.

The rich economies of the west are expected to shrink by as much as 6.1 percent on average, with Italy and Spain – the two worst-affected European economies from COVID-19 so far – falling by 9.1 and 8 percent respectively, the IMF said.

China’s growth rate is expected to fall to a decade low of 1.2 percent in 2020 from 6.1 percent last year, while India is on course to expand by 1.9 percent, down from 4.2 percent.

The IMF predicts that sub-Saharan Africa’s gross domestic product will contract by 1.6 percent in 2020, compared to 3.1 percent growth in 2019.

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The IMF and the World Bank — which also forecasts a recession for sub-Saharan Africa in 2020 — are racing to provide emergency funds to African countries and others to combat the coronavirus and mitigate the impact of sweeping shutdowns aimed at curbing its spread.