The Great Lockdown: Worst Economic Downturn Since the Great Depression

What will our economies look like once the Corona Crisis has passed? Knowing that they will not remain unchanged, this article provides a sobering vision of the year ahead. 

This piece by Gita Gopinath describes what the impact of the current lock-down will have on the mondial economy. The article predicts that both advanced and emerging economies will suffer a recession (unlike the Financial Crisis in 2008/9, when emerging markets kept up their annual growth), although the rate at which this will happen differs. Besides continuing vigilance in containing the spread of the virus, Gopinath also encourages a preparation for the recovery. For this, Gopinath suggests that “[m]ultilateral cooperation is vital to the health of the global recovery.” Governments should continue their stimulus programmes, encourage hiring, maintain production- and supply lines, and support debt restructuring. All this might minimise the longer term impact of the current economic freeze.

Even though it is tough reading, Gopinath has some helpful suggestions to prepare for the inevitable lift of economic and social restrictions. The better this preparation is done, the quicker the recovery. 

Read Full Story on IMFBlog

Author: Gita Gopinath
Original Language:English 
Published on: 14 April 2020

Photo: AbsolutVision on Unsplash

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