IMF set to slash economic forecasts, warns of unprecedented crisis

IMF warns of a crisis ‘unlike anything the world has seen’

“For the first time since the Great Depression, both advanced and emerging market economies will be in recession in 2020.”,  according to Gita Gopinath, the IMF’s chief economist, said in a blog post.

The forthcoming June World Economic Outlook Update is likely to show negative growth rates even worse than previously estimated, she added

The global economy is on track for a more significant contraction than the International Monetary Fund estimated back in April, the institution’s chief economist said Tuesday.

When European countries were in their first weeks of lockdown, the IMF said the global economy would suffer the worst financial crisis since the Great Depression of the 1930s. At the time, it forecast a contraction by 3 percent in 2020.

Now, despite some economies beginning to reopen, the Fund has warned that the decline could be even worse.

The Fund also said the current crisis, which it dubbed the Great Lockdown, is “unlike anything the world has seen before.”

The pandemic started as a health emergency but soon sparked an economic crisis, due to the required social-distancing measures and travel-restriction measures.