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April 10, 2020 03:30 am

Coronavirus: Worst Economic Crisis Since 1930s Depression, IMF Says

An anonymous reader quotes a report from the BBC: The coronavirus pandemic will turn global economic growth "sharply negative" this year, the head of the International Monetary Fund (IMF) has warned. Kristalina Georgieva said the world faced the worst economic crisis since the Great Depression of the 1930s. She forecast that 2021 would only see a partial recovery. Ms Georgieva, the IMF's managing director, made her bleak assessment in remarks ahead of next week's IMF and World Bank Spring Meetings. Emerging markets and developing countries would be the hardest hit, she said, requiring hundreds of billions of dollars in foreign aid. "Just three months ago, we expected positive per capita income growth in over 160 of our member countries in 2020," she said. "Today, that number has been turned on its head: we now project that over 170 countries will experience negative per capita income growth this year." She added: "In fact, we anticipate the worst economic fallout since the Great Depression." Ms Georgieva said that if the pandemic eased in the second half of 2020, the IMF expected to see a partial recovery next year. But she cautioned that the situation could also worsen. "I stress there is tremendous uncertainty about the outlook. It could get worse depending on many variable factors, including the duration of the pandemic," she said. Ms Georgieva's comments came as the U.S. reported t hat the number of Americans seeking unemployment benefits had surged for the third week by 6.6 million, bringing the total over that period to more than 16 million Americans. "If you compare those claims to the 151 million people on payrolls in the last monthly employment report, that means the U.S. has lost 10% of the workforce in three weeks," reports NBC News. The U.S. Federal Reserve said Thursday it will invest up to $2.3 trillion in loans to aid small and mid-sized businesses and state and local governments as well as fund the purchases of some types of high-yield bonds, collateralized loan obligations and commercial mortgage-backed securities. "The money comes on top of the massive stimulus that the Fed had already announced and it thrusts the institution into the sort of speculative lending activities it had shunned in the past -- underscoring the risks that Chairman Jerome Powell is willing to take to shore up the economy," adds Bloomberg.

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