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

(Image credit: DANIEL SLIM/AFP via Getty Images)

published 14 April 2020

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.

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Tim is a staff writer at The Week and has contributed to Bedford and Bowery and The New York Transatlantic. He is a graduate of Occidental College and NYU's journalism school. Tim enjoys writing about baseball, Europe, and extinct megafauna. He lives in New York City.

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