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What is the future of the economy in 2020


The world’s economies will shrink faster and farther this year than at any time experienced since the Great Depression in 1930. The International Monetary Fund’s (IMF) April 2020 World Economic Report begins its dismal report by stating:

“The COVID-19 pandemic is inflicting high and rising human costs worldwide, and the necessary protection measures are severely impacting economic activity. As a result of the pandemic, the global economy is projected to contract sharply by –3 percent in 2020, much worse than during the 2008–09 financial crisis.

The Great Lockdown will experience the worst recession since the Great Depression.

economy forecast covid-19

In a baseline scenario, which assumes that the pandemic fades in the second half of 2020 and containment efforts can be gradually unwound—the global economy is projected to grow by 5.8 percent in 2021 as economic activity normalizes, helped by policy support. The risks for even more severe outcomes, however, are substantial.

Effective policies are essential to forestall the possibility of worse outcomes, and the necessary measures to reduce contagion and protect lives are an important investment in long-term human and economic health.

Because the economic fallout is acute in specific sectors, policymakers will need to implement substantial targeted fiscal, monetary, and financial market measures to support affected households and businesses domestically.

And internationally, strong multilateral cooperation is essential to overcome the effects of the pandemic, including to help financially constrained countries facing twin health and funding shocks, and for channeling aid to countries with weak health care systems”.

economy impact of coronavirus
Cartoon [Sabaaneh/MiddleEastMonitor]

In what she calls the“Great Lockdown,” IMF’s Chief Economist, Gita Gopinath stated, “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”.

She went on to describe the current Covid-19 driven crises as a great lockdown and recently told reporters that “this is a crisis like no other.” She expects the total cost to global GDP to be $9 trillion in 2020 alone.”

The unprecedented worldwide impact from Covid-19 has caused substantial economic devastation and no one knows when it might end or what the final economic tally might be.

The IMF has warned of an expected 13% – 32% contraction in global economic output which they expect to be felt for a long time. The IMF’s published economic growth perceptions are listed below:

Economic

In addition to IMF’s worrisome projections, Goldman Sachs also projects a 35% contraction of global economies in Q2 of 2020.

Despite promising signs of economic expansion starting China (where the virus seems to have peaked), Goldman Sachs believes the worst is yet to come, especially if countries lift isolation and relax social distancing guidelines.

The firm’s economist Jan Hatzius, said, “The improvement is probably a direct consequence of social distancing and the plunge in economic activity and could reverse quickly if people just went back to work.”

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Disclaimer: Forex and Contracts for Difference (CFDs) are complex instruments and come with a high risk of losing money due to leverage. Forex trading is not suitable for everyone. You should consider whether you understand how forex and CFDs work and whether you can afford to take the high risk of losing your money.

The forex brokerages displayed shall disclaim the overall performance of traders in their platforms. Oanda warns that 76.8% of retail forex traders lose money trading CFDs. XTB warns that 80% of retail forex traders lose money trading CFDs. The forex broker Fxcm warns that 69.66% of retail forex traders lose money trading CFDs.

The performances aforementioned are not related to Wiseinvest AI forex trading and AI forex signals system. You can check the performance of our AI forex system on our dashboard.