(Kitco News) The world is in for the worst financial crisis since the Great Depression of the 1930s as the global economy grapples with the “great lockdown,” according to the latest from the International Monetary Fund (IMF).
The expectations now are that the global economy will contract by 3% in 2020, which is much worse than the 0.1% GDP decline seen during the Great Recession of 2009, the IMF said. The economic recovery is priced in for 2021 with 5.8% global growth.
“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,” IMF chief economist Gita Gopinath said in the latest World Economic Outlook report.
Gopinath described the COVID-19 crisis as “a great lockdown” and told reporters on Tuesday that “this is a crisis like no other.” The total cost to the global GDP could amount to $9 trillion, Gopinath added.
Canada is expected to be hurt more than the U.S. or Japan. According to the IMF’s breakdown, a 5.9% contraction is expected in the U.S., a 7.5% drop in 19 European countries, a 6.2% decline in Canada, a 5.2% drop is projected for Japan, and a 6.5% contraction penciled in for the U.K.