BACK IN JANUARY the International Monetary Fund (IMF) was predicting that the global economy would grow at a “sluggish” pace of 3.3% in 2020. How rosy that now seems. In its latest World Economic Outlook (a twice-yearly report) published on April 14th, the IMF forecasts that output will shrink by 3% this year as a result of the covid-19 pandemic. If the fund is anywhere near the mark, this would be the first decline since 2009.
The downturn this time will be much deeper. In 2009, during the global financial crisis, world GDP fell by only -0.1%, as emerging economies continued to expand. This time the IMF reckons that a large share of countries—accounting for about 70% of global GDP in purchasing-power-parity terms—will fall into recession. Output in advanced economies is expected to shrink by 6.1% in 2020; in poorer countries it is forecast to fall by 1%.
Growth will bounce back once the pandemic passes: the fund expects rich countries to grow by 4.5%, and poorer ones by 6.6%, in 2021. But this could still prove optimistic. The fund warns that the fate of the