The International Monetary Fund (IMF) is projecting that the global economy will contract by 3% in 2020 as companies and governments worldwide face a health crisis, a financial crisis, and a collapse in commodity prices. The IMF also reports that this figure could near 6% if policy responses fail to prevent widespread firm bankruptcies, system-wide strain, and job losses. The projected 3% drop in real GDP growth around the world assumes that peak containment efforts will occur during the second quarter of 2020. Should the 3% projection hold true, it would far surpass the 0.1% drop during the Global Financial Crisis of 2009.
The IMF is also projecting the global economy to partially recover in 2021. This relatively quick recovery would depend on policy actions taken to limit firm bankruptcies, job losses, and system-wide financial strains. Even with such a recovery, the cumulative global GPD loss over 2020 and 2021 could reach $9 trillion and income per capita is projected to shrink for over 170 countries. Countries reliant on tourism, travel, hospitality, and entertainment for their growth will experience large disruptions, particularly those with developing economies or emerging markets.
