Global economy to suffer: The International Monetary Fund has said that economies of countries around the world are suffering so much that this year the global economy will fall by 3 percent.
The IMF has described it as the worst global decline of decades after the 'Great Depression of the year 1930'.
The IMF says that the coronavirus epidemic has put the world in a 'historical crisis.'
Global economy to suffer the worst disaster since the 1930s
The institution has also said that if the epidemic of COVID-19 continues for a long time, then the ability of governments and central banks to handle the crisis will be a real test.
IMF chief economist Geeta Gopinath said, "The Corona crisis will waste nine trillion dollars of the world's GDP (GDP) in the next two years."
Historical lockdown However, the IMF, in its latest 'World Economic Outlook' on the world economy, has praised the 'quick and concrete measures' taken in countries like Britain, Germany, Japan, and the USA.
However, in the 'World Economic Outlook,' it has also been said that no country will be able to survive this loss. If the epidemic of COVID-19 is overcome in the second half of the year 2020, then next year, the global growth rate could be 5.8%.
Geeta Gopinath said on Tuesday that the 'historic lockdown' had brought a 'wretched truth' to the governments facing 'severe uncertainty' due to the Corona crisis.
"There is a possibility of partial compensation in 2021. But the GDP rate will be less than before the corona. Also, there will be uncertainty about the extent to which the situation will improve. The scale of development may be extremely bad, and the results would be worst. "
State of America and China Geeta Gopinath said that this might be the first time that both developed and developing countries get caught in the cycle of recession after the economic depression of 1930.
In the case of developed countries, the International Monetary Fund has warned that their economies are not going to achieve the high levels of the pre-Corona era before 2022.
The US economy may have to suffer a loss of 5.9 percent this year. This will be the most significant loss for them after the year 1946. The unemployment rate in the US is expected to be 10.4% this year.
By 2021, the US economy is expected to improve at a rate of 4.7 percent with some improvement. In the case of China, the IMAF says that this year its economy can grow by 1.2 percent. This will be the slowest growth rate for China after 1976.
Global economy to suffer the worst
Australia may face a recession for the first time after 1991 The IMF has also warned that if the epidemic takes too long and the Corona crisis returns in 2021, the situation may worsen, and the global GDP may have to suffer another eight percent.
For heavily indebted economies, the situation may worsen. Nobody would like to pay any debt to such countries, and this would increase the cost of their debt.
Financial Crisis Economic activity has come to a standstill due to prolonged lockdown, but the IMF has said that quarantine and social distancing are essential measures.
The organization has said that these are necessary steps to stop the virus from spreading, and they have got time to manage the health care system. To tackle the economic side effects of the epidemic, the IMF has put forth four priorities.
The first is that more money should be invested in the health care system, financial assistance is given to the employees and business people, the central bank should continue its help, and there should be a concrete plan to overcome the bad situation.
The IMF has also appealed to the world to work together towards finding vaccines and cures. The institution has said that many developing countries will need relief from debt in the coming years and months.