The International Monetary Fund or IMF is predicting global economic output will shrink by 3% in 2020. The organization also forecasts a loss to global GDP of nine trillion dollars for this year and the next chief economist at the IMF Gita Gopinath says, lock down saved lives which allows the Econo to pick up when the crisis is over.
Flattening the spread of covid19 using lockdowns allows health systems to cope with this crises, which then permits a resumption of economic activity in this sense. There is no trade-off between saving lives and saving livelihoods. Back in January the IMF’s World Economic Outlook saw this year’s economy rising about 3% making the new projection a 6.3% downgrade.
Gopinath says, what she calls the great lockdown, could lead to the worst recession since the Great Depression is far worse than the 2008 financial crisis. But Gopinath adds that the predictions come in spite of substantial uncertainties, regarding the way the virus spreads-that includes how useful containment measures are and what therapies or vaccines become available.
The IMF expects the US economy to contract nearly 6% this year but predicts a 5% expansion in 2021. It also forecasts that China, the world’s second largest economy, will have a small net growth this year, as the outbreak already peaked in the first quarter. But some economists say China is faced with two dire problems, a severe drop in demand for exports and a potential second wave of infection hitting the country and the world’s biggest lockdown continues as the number of virus cases rises in India. India is extending the lockdown for its 1.3 billion people until May 3rd as its number of confirmed cases rises to 10,000. Since India first imposed the lockdown in late March, the unemployment rate has almost doubled now around 14.5 %.
Russia’s Rose growers are forced to destroy their flowers after a virus related plunge in sales in a country where flowers are so popular that some florists operate around the clock. 1.2 million roses are now destroyed each day.
The number of infections has now surpassed 21,000 in Russia. The local Moscow government introduced tougher measures to curb the spread of the virus. Police checkpoints and round-the-clock patrols have been set up around the region to ensure that only residents enter the capital and that they have a valid reason.
European countries are also taking different approaches. Spain and Austria allowed partial returns to work on Tuesday. Britain and France on the other hand, extended lockdown measures. In Italy, some businesses including bookstores, stationers and shops selling children’s clothing were allowed to open their doors in the Veneto region. Another restriction was lifted when that required joggers to stay within 200 yards of their house.