The global economy is set for a severe recession that is going to be the worst since the Great Depression of the 1930s, as coronavirus, or Covid-19, pandemic claims thousands of human lives and the containment measures adopted to slow the outbreak hamper economic activity, the International Monetary Fund warned Tuesday.
World GDP is set to contract 3 percent this year, thanks to the lockdowns imposed by countries across the world, the IMF said in its latest World Economic Outlook report. The lender expects the global GDP to grow 5.8 percent next year. In a January update to the WEO, the IMF had predicted 3.3 percent global growth this year and 3.4 percent expansion for next year. In 2019, the world economy grew 2.9 percent. These projections are based on a scenario that assumes the pandemic will fade in the second half of 2020 and the containment measures can be gradually unwound as economic activity normalizes. "The risks for even more severe outcomes, however, are substantial," the IMF warned. "It is very likely that this year the global economy will experience its worst recession since the Great Depression, surpassing that seen during the global financial crisis a decade ago," IMF Chief Economist Gita Gopinath said in the foreword to the report. More severe outcomes are likely "if the pandemic and containment measures last longer, emerging and developing economies are even more severely hit, tight financial conditions persist, or if widespread scarring effects emerge due to firm closures and extended unemployment," Gopinath said. China, where the Covid-19 pandemic started, is forecast to grow a modest 1.2 percent this year, but rebound with a growth surge of 9.2 percent next year. All advanced economies are expected to log severe declines in GDP this year. Advanced economies as a whole are forecast to contract 6.1 percent this year and expand 4.5 percent next year.
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Business News
May 08, 2026 15:50 ET Manufacturing and services sector survey results and labor market data from main economies were the highlight on the economics news front this week. Factory orders and jobs report dominated the news flow in the U.S. Similarly, industrial production data from German garnered attention in Europe. In Asia, purchasing managers’ survey results from China and the central bank decision from Australia were in focus.