The International Monetary Fund says the world is heading for the worst economic collapse since the Great Depression in the 1930s.
The IMF said most of the world’s nations will suffer major economic recession in 2020 and into 2021.
“We now project that over 170 countries will experience negative per capita income growth this year,” IMF Managing Director Kristalina Georgieva said.
The IMF painted a bleak picture of the social and economic impact of the Covid-19 virus.
“Just three months ago, we expected positive per capita income growth in over 160 of our member countries in 2020,” she said on Thursday.
“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.
The US and Europe are in particular trouble right now.
France and Germany had said they were entering recession in recent days. The European Union is currently unable to come to an agreement on what to do to save the Eurozone economy.
The Italian Prime Minister is warning that the EU may break up if the crisis continues.
In the US over the past 3 weeks, 16.6 million Americans have lost their jobs.
Oxfam is reporting that 500 million people could fall into poverty if the crisis gets worse.
Research mconducted by King’s College London and the Australian National University – said that a 20% drop in income as a result of a recession caused by Covid-19 would push an additional 548 million people below $5.50 a day – one of the World Bank’s definitions of poverty.
José María Vera, Oxfam’s international interim executive director, said: “The devastating economic fallout of the pandemic is being felt across the globe. But for poor people in poor countries who are already struggling to survive, there are almost no safety nets to stop them falling into poverty.
“G20 finance ministers, the IMF and the World Bank must give developing countries an immediate cash injection to help them bail out poor and vulnerable communities.”
A report by PWC shows GDP will fall significantly in Australia and across the world.
Sydney News for more
Ryan is Contributing Editor