Will the "Great Lockdown" of 2020 usher in the worst global economic downturn since the Great Depression of the 1930s? In an grim forecast, the International Monetary Fund says yes.
In a virtual news conference Tuesday, the IMF said global economic activity will shrink by 3% this year. That's down from original projections calling for greater than 3% growth. And chief economist Gita Gopinath said rippling impacts of the shift will be severe.
"The world has been put in a great lockdown. The magnitude and speed of collapse in activity that has followed is unlike anything experienced in our lifetimes. This is a crisis like no other, which means there is substantial uncertainty about the impact it will have on people's lives and livelihoods," Gopinath said.
The IMF says the downturn will likely be more disruptive than the global financial meltdown of 2008 — even with projections of a limited recovery next year.
The dour forecast comes as President Trump is pledging to move ahead to restart the U.S. economy.
"We are close to completing a plan to open our country, hopefully even ahead of schedule. And that's so important."
But U.S. Chamber of Commerce President Suzanne Clark says the U.S. will not be able to "turn the light switch on and have everyone go back to work." She told The New York Times: “It’s going to be the opposite of a green light. It’s going to go from red to yellow and then green.”
The IMF economic forecast is stark for many parts of the world. Italy is expected to see its GDP fall this year by 9%. Spain is expecting an 8% decline. China was expected to see 6% growth. That has been revised downward, to just over 1%.
For now, Gopinath of the IMF says the virus is in charge.
"A lot will depend on the epidemiology of the virus, the effectiveness of containment measures and the developments of therapeutics and vaccines, variables which are very hard to predict."
For Newsy, I'm Peter Hecht.
Contains footage from CNN.
