I.M.F. predicts the worst economic downturn since the Great Depression
Source: New York Times
The International Monetary Fund issued a stark warning about economic damage from the coronavirus, saying on Tuesday that the global economy faces its worst downturn since the Great Depression as shuttered factories, quarantines and national lockdowns cause economic output around the world to collapse.
In its World Economic Outlook, the I.M.F. projected that global growth will contract by 3 percent in 2020, an extraordinary reversal from earlier this year, when the fund forecast that the world economy would outpace 2019 and grow by 3.3 percent. This year’s fall in output would be far more severe than the last recession, when the world economy contracted by less than 1 percent between 2008 and 2009. A 3 percent decline in global output would be the worst since the Great Depression, the I.M.F. said.
“As countries implement necessary quarantines and social distancing practices to contain the pandemic, the world has been put in a Great Lockdown,” said Gita Gopinath, chief economist of the I.M.F. “The magnitude and speed of collapse in activity that has followed is unlike anything experienced in our lifetimes.”
Ms. Gopinath said that the loss of global output will be “far worse” than the 2008 financial crisis and that policymakers are facing an unusual predicament in that traditional stimulus measures are little match for a pandemic that is being fought with shutdowns and quarantines.
“It is very likely that this year the global economy will experience its worst recession since the Great Depression,” she said.
Read more: https://www.nytimes.com/2020/04/14/us/coronavirus-updates-usa.html?action=click&module=Spotlight&pgtype=Homepage#link-1a97c55
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logosoco
(3,208 posts)and anyone who will listen, we need to call this the Viral Depression. Because it was caused partly by a virus (along with 4 decades of too much republican rule) and because we say things go viral on the internet and the internet is helping us get through this part and will hopefully do so as whatever is going to happen.
(I have very little understanding of how the economy works, but I can see something is going to come of this!)
Igel
(35,425 posts)It's not about us.
This is global. It includes the other 4.4 billion people.
One projection is that it'll set antipoverty measures back 9 or 10 years, with more than the entire population of the US going below the poverty level (and I think that's just in Africa).
Republicans don't rule Africa. India isn't governed by Trump. McConnell is not in charge of the EU, or is Graham all that important when it comes to South America.
This kind of depression, if it goes that way, usually gives people the idea to try something grand. What comes out of it is more centralization. Provided it's slight--not usually what they want--it might work. Otherwise you get centralization, a "this needs to be done, even if it hurts people in the short term" and you wind up with a Hitler, Stalin, or Mao. Hindu nationalism started in the Depression under British rule. Japan's expansionist policies started in the Depression. At the time, Mao and Stalin were uber "progressive"--it was only later, sometimes much later, that they became tainted and were suddenly never progressive and history was revised. Just remember--American revolution and French revolution were twins. But one assumed you can't trust rulers and imposed modesty, even too much modesty, on government; the other assumed leaders were good and wise and wanted a proud, strong government. If the US leadership had gone Jacobin, they'd have been the ones beheaded, and yet some Americans still admire those excesses.
And it is virus induced. Would have been nice to know earlier that it was spread human-to-human (that was announced on 1/20 by the PRC) with a lot of asymptomatic-yet-infectious bearers of the virus (confirmed much later, even though China wasn't included such positives in its list of positives). Earlier action to squelch the virus and less attention on saving reputation would have been good.
bucolic_frolic
(43,702 posts)So yeah, we have a glut of all but consumables and critical parts. These are the distortions created by easy money. Overcapacity because every business investment project had sky high profits on a spreadsheet when capital was free and interest rates were zero. It even made buying your own stock and concentrating risk look like a good idea.
The fallout of all this mismanagement is here. The bankers will try to save themselves and their power. Nothing else is relevant to them.
Laelth
(32,017 posts)-Laelth
SoonerPride
(12,286 posts)That I can tell you.
47of74
(18,470 posts)
Dopers_Greed
(2,640 posts)Baclava
(12,047 posts)
dalton99a
(81,851 posts)Nacht Owl
(66 posts)Botany
(70,730 posts)
machoneman
(4,026 posts)36 month or so or Tumpy's term (note: no leadership tag need apply here!) we were:
-due or way overdue for a normal economic downturn anyway. Not nearly as severe as what we have just encountered yet a say 10% correction was almost a given.
-way overpriced on real estate and other gains in the Dow and other stock market indicies.
-suffering already BEFORE the pandemic from the trillion dollar tax giveaways by Trump and the Republiscums which accelerated our decline with debt levels not seen since WWII.
-aware that the current 2020 heavily-weighted money grab towards millionares and big corporations that suffered losses due to business closures may have been necessary, but have further tilted our economic progress downwards.
-aware that the little folks who would spend the money if they still worked may also spend that paltry $1,200 yet know this cannot keep them afloat or even in food.
Sad that the Republiscums and Trump have brought our great country to its knees so far and so fast. It didn't have to be this way.........
Response to Nacht Owl (Original post)
elocs This message was self-deleted by its author.
