World Economic Crisis 2020
The IMF confirms that in 2020 we will experience the worst economic recession in 90 years
The International Monetary Fund (IMF) has reported that the worst financial crisis in history worldwide will occur in 2020 due to the effects of the coronavirus. The monetary institution also assumes that the pandemic “has led the world into a recession”.
Economic damage, says the IMF, is increasing in all countries due to the rapidity with which the virus is spreading and as a consequence of the containment measures implemented by governments. In its blog, the monetary institution invites you to look at the evolution of China to understand the scenarios that may arise in other countries.
China has been the first country to experience the full force of the disease, says the IMF, however, other countries such as Italy, Spain and France are being strongly affected by this pandemic, as is the United States, where the number of infected it has fired quickly.
At the same time, the IMF notes that in many emerging markets and developing economies the pandemic appears to have only just begun to expand and has therefore not yet suffered its consequences.
Italy has become the first country in Europe to be hit by the economic effects of the coronavirus, after its government imposed the national closure on March 9 to contain the spread of the coronavirus.
These measures have resulted in a slowdown in economic activity. In the same way, it has been reflected in electricity spending, especially in the northern regions of Italy, where the highest number of infections has been registered.
However, the rest of the countries in Europe and especially Spain and France, are also suffering the devastating consequences of the pandemic. That is why Europe proposes aid to mitigate the economic crisis, although there is difficulty in reaching a consensus on the part of the member states to address the situation that the coronavirus is leaving.
The Government of Spain decreed the state of alarm and the cessation of activities not considered of primary necessity on March 14. Since then the number of claims for unemployment benefits has increased by more than 300,000 people.
From the blog, they insist on the need to guarantee the support measures that are being studied by Brussels so that they are available in the affected countries through financial aid and policy advice and technical assistance. The monetary institution has recognized that more data will be released on the economic impact of the pandemic on April 14 when it publishes its Perspective for the world economy.
The United States, where the virus spreads with great speed, is another country that, according to the IMF, is suffering in a very marked way from the consequences of COVID-19. In the last weeks of March, almost 10 million people have applied for unemployment benefits, figures that had not been seen in the country even at the peak of the 2009 global financial crisis.
Disruption of business and industry activities caused by the virus are beginning to be seen in emerging markets. Manager surveys (PMI) point to a sharp slowdown in manufacturing output in many countries, reflecting declines in external demand and rising expectations of declining domestic demand.
The modest recovery in economic activity in China, according to the Fund, is encouraging for the rest of the countries and suggests that containment measures may be successful in controlling the pandemic and paving the way for the resumption of economic activity.
However, the IMF points out that there is great uncertainty about the future of the pandemic and a resurgence of its spread in China and other countries. “To overcome this pandemic, we need health and a coordinated global economy,” he explained.