IMF estimates global GDP will shrink by 3 percent, dwarfing 0.1 percent financial crisis contraction

The International Monetary Fund has finally spoken — and it isn't pretty.

In the first World Economic Outlook report since the COVID-19 coronavirus pandemic began, the IMF estimated Tuesday that the global GDP will shrink 3 percent this year, far beyond the 0.1 percent contraction in 2009 amid the financial crisis. Like many other forecasters, though, the IMF thinks there will be a significant rebound in 2021, pegging its prediction at 5.8 percent. The U.S., meanwhile, is expected to see its GDP fall by nearly 6 percent, and then jump back up by 4.7.

The anticipated recoveries are somewhat reassuring news, but if the forecast is accurate, the global market would still fall short of its pre-virus trends. The organization was also very cautious in their projections, acknowledging that if the virus hangs around for longer than expected or rebounds at a later point, an even greater contraction could be expected, as well as a slower recovery. "Like in a war or a political crisis, there is continued severe uncertainty about the intensity of the duration and intensity of the shock," said Gita Gopinath, the IMF's chief economist. Read more at Bloomberg.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up