The International Monetary Fund (IMF) in a report released Tuesday predicted that the coronavirus pandemic will spark the worst recession since the Great Depression in the 1930s.
The IMF predicted in its World Economic Outlook that the global economy will decrease 3 percent in 2020. The world economy is then expected to rebound in 2021 with 5.8 percent growth, the IMF said.
April’s IMF forecast marks a stark difference from its prediction in January, before governments instituted lockdowns, businesses closures and travel bans, that the global economy would grow 3.3 percent in 2020.
The IMF on Tuesday predicted growth would decrease 5.9 percent in the U.S., 7.5 percent in European countries using the euro, 5.2 percent in Japan and 6.5 percent in the U.K.
China, meanwhile, is expected to see 1.2 percent growth this year.
The organization also anticipates a global trade drop of 11 percent in 2020 and an increase of 8.4 percent in 2021.
“This crisis is like no other,” Gita Gopinath, the IMF’s chief economist, wrote in a foreword to the report. “Like in a war or a political crisis, there is continued severe uncertainty about the duration and intensity of the shock.”
The IMF acknowledges, however, its predictions are clouded by uncertainty involving how the virus will spread, how effective government containment policies will be and whether people will continue to isolate or refrain from spending money in the coming months.
The IMF used three alternative models, including one in which the virus lasted longer than expected, returned in 2021 or both. If the virus were to last longer and return in 2021, the global output could shrink by 8 percent next year, it said.
The organization also said the U.S. jobless rate could reach 10.4 percent this year. Already, more than 16 million people have applied for unemployment in a three-week period.
The IMF and World Bank will host their spring meetings virtually for the first time ever this week.