New Delhi: As the coronavirus cases across the globe continued to rise despite taking strict measures, IMF Managing Director Kristalina Georgieva on Thursday said that the year 2020 could see the worst global economic fallout since the Great Depression in the 1930s with over 170 countries likely to experience negative per capita income growth due to the pandemic. Also Read - IMF Chief Warns of Recession Worse Than 2008 Global Financial Crisis
She said this while speaking on ‘Confronting the Crisis: Priorities for the Global Economy’ ahead of next week’s annual Spring meeting of the International Monetary Fund (IMF) and the World Bank. Also Read - We Have Entered Recession Which Will be Worse Than 2009 Financial Crisis: IMF Chief
“Today, the world is confronted with a crisis like no other. COVID-19 has disrupted our social and economic order at lightning speed and on a scale that we have not seen in living memory,” Georgieva said. Also Read - Coronavirus: IMF Calls For Coordinated Action to Provide Stability to Global Economy
She also said that the COVID-19 pandemic is causing a tragic loss of life, and the lockdown needed to fight it has affected billions of people. “What was normal just a few weeks ago going to school, going to work, being with family and friends is now a huge risk,” she said.
“Just three months ago, we expected positive per capita income growth in over 160 of our member countries in 2020. Today, that number has been turned on its head: we now project that over 170 countries will experience negative per capita income growth this year,” she added.
Saying that the world is facing an extraordinary uncertainty, she said that the global growth will turn sharply negative in 2020. “In fact, we anticipate the worst economic fallout since the Great Depression,” Georgieva said.
She said that the Great Depression was the worst worldwide economic downturn that lasted for 10 years from 1929, beginning in the US when the New York Stock Exchange on Wall Street crashed and wiped out millions of investors.
She also stated that the world economy is taking a substantial hit even as necessary containment measures to slow the spread of the virus are being taken.
“This is especially true for retail, hospitality, transport, and tourism. In most countries, the majority of workers are either self-employed or employed by small and medium-sized enterprises. These businesses and workers are especially exposed,” she added.
(With inputs from agencies)