- Economies in Asia will see zero growth this year for the first time in 60 years.
- Global economy will face the “worst recession since the Great Depression”.
- China’s expected growth figure is a significant fall from the 6% growth estimate forecast in January.
- The world’s second-largest economy is expected to see a rebound later this year, with growth bouncing back to 9.2% next year.
The International Monetary Fund (IMF) warns that the global economy will face the “worst recession since the Great Depression”, says an article published in BBC.
According to the IMF, economies in Asia will see zero growth this year for the first time in 60 years.
It also warns that the global economy will face the “worst recession since the Great Depression”.
Extraordinary actions to be taken
National lockdowns have hit Asia’s service sector so hard that they will struggle to rebound, it said.
Changyong Rhee, director of the IMF’s Asia and Pacific Department, warned that governments would need to take extraordinary actions as a result.
“This is not a time for business as usual. Asian countries need to use all policy instruments in their toolkits.”
The IMF said, policymakers must offer support to households and firms hardest-hit by travel bans, social distancing policies and other containment measures.
The IMF said, growth drop will be “worse than the annual growth rates throughout the Global Financial Crisis (4.7%), or the Asian Financial Crisis (1.3%).”
The Washington-based lender expects a 7.6% expansion in Asian economic growth next year if containment policies succeed, but added the outlook was “highly uncertain.”
Virus could come back
China, reports its economic growth figures for the first three months of 2020 is expected to grow by 1.2% this year.
This is a significant fall from the 6% growth estimate the IMF forecast in January.
The IMF said it expects a rebound in economic activity later this year. This is because China is emerging from the outbreak first.
The IMF warned, there are clear risks that the virus could come back and normalization could take longer.
- The world’s second-largest economy is expected to see a rebound in activity later this year, with growth bouncing back to 9.2% next year.
- Asia could likely see zero growth this year, for the first time in 60 years.
Generation’s great depression
The coronavirus economic crisis will be even worse – our generation’s Great Depression.
The IMF says governments must help these households and firms survive because the impact of the coronavirus will be “severe, across the board and unprecedented”.
But the reality is only a few countries in the region have that sort of financial firepower to do this.
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