According to the IMF, the global economy is set to decline by 3% in 2020. The organisation views this as the worst decline since the 1930’s great depression. The Chief Economist at IMF, Gita Gopinath says that this could knock about $9 trillion or £7.2 trillion off the global GDP in the coming two years.
Impact on countries
Although countries such as Germany, UK, US and Japan received praise for their fast response, this does not keep them from feeling the impact. However, if the pandemic continues into the final half of 2020, there is hope for a 5.8% rebound. If the virus persists, then more adverse effects will be felt.
The UK is set to record a 6.5% shrink on its GDP and joblessness might surpass the financial crisis in most countries. The furlough scheme might limit the unemployment rate from increasing, taking it to 4.8% compared to 3.8% in 2019. There is hope for a partial recovery in 2021, but the growth rate might remain low.
Although such effects are bad news for the economy, governments still need to set their priorities right and pay attention to the health sector.