The global economy was facing the worst collapse since the second world war as coronavirus began to strike in March, well before the height of the crisis, according to the latest Brookings-FT tracking index. The index comes as the IMF prepares to hold virtual spring meetings this week, when it will release forecasts showing the deepest contraction for the global economy since the 1930s great depression.
With confidence indicators falling off a cliff, financial markets in turmoil and real economic indicators plunging, bankruptcies and job losses will leave deep scars on the world economy and hinder its healing for a long time to come, the data suggest. Kristalina Georgieva, IMF managing director, said that 170 of its 189 member countries would suffer falling output per head in 2020. “Thebleak outlook applies to advanced and developing economies alike. This crisis knows no boundaries. Everybody hurts,” she said.
Three months ago, the fund had expected increases in prosperity in 160 countries. With no country immune from the Covid-19 crisis, a recovery once the lockdowns have been eased is likely to be slower than hoped, said Professor Eswar Prasad of the Brookings Institution , who railed at the lack of a co-ordinated policy response from governments.