GREAT DEPRESSION 2020 Ugc net and other competitive exams

GREAT DEPRESSION 2020 Ugc net and other competitive exams

Great Depression 2020

The International Monetary Fund issued a stark warning on Tuesday about the coronavirus’s economic toll, saying that the world is facing its worst downturn since the Great Depression as shuttered factories, quarantines and national lockdowns cause economic output to collapse.

The grim forecast underscored the magnitude of the shock that the pandemic has inflicted on both advanced and developing economies and the daunting task that policymakers face in containing the fallout. With countries already hoarding medical supplies and international travel curtailed, the I.M.F warned that the crisis threatened to reverse decades of gains from globalization.

In its World Economic Outlook, the I.M.F. projected that the global economy would contract by 3 percent in 2020, an extraordinary reversal from early this year, when the fund forecast that the world economy would outpace 2019 and grow by 3.3 percent. This year’s fall in output would be far more severe than the last recession, when the world economy contracted by less than 1 percent between 2008 and 2009.

“As countries implement necessary quarantines and social distancing practices to contain the pandemic, the world has been put in a Great Lockdown,” said Gita Gopinath, the I.M.F.’s chief economist. “The magnitude and speed of collapse in activity that has followed is unlike anything experienced in our lifetimes.

According to the I.M.F., the global economic contraction from 1929 to 1932 was approximately 10 percent. Advanced economies shrank by 16 percent during that period.


Governments around the world are grappling with how and when to reopen parts of their economies in hopes of reviving business activity.For developing countries like  India it will be very difficult to put entire country  to hold as it will cause a shattered Economy and can create the following effect.

The continous lockdown could effect in terms of
Financail crisis for Govt around the world.
High level of unemployment due to disrturbance in demand and supply chain and Financail crisis effect on infrastrasure mean less jobs.
Effect on Export as large part of world will face financail crisis effecting BOP
Small and medium scale industries will be effected and countries will have to give bail out package


But the economic recovery is expected to be slow until Govt and people are confident it’s safe.

“Even if spending starts to bottom in April, we see little chance of a meaningful pickup in activity in the immediate future,”the bottom of the current downturn will occur until june at the earliest.”

The coronavirus will cause the deepest postwar recession in  history of world .


This is a crisis like no other, and there is substantial uncertainty about its impact on people’s lives and livelihoods. A lot depends on the epidemiology of the virus, the effectiveness of containment measures, and the development of therapeutics and vaccines, all of which are hard to predict. In addition, many countries now face multiple crises—a health crisis, a financial crisis, and a collapse in commodity prices, which interact in complex ways. Policymakers are providing unprecedented support to households, firms, and financial markets, and, while this is crucial for a strong recovery, there is considerable uncertainty about what the economic landscape will look like when we emerge from this lockdown.

Under the assumption that the pandemic and required containment peaks in the second quarter for most countries in the world, and recedes in the second half of this year, in the April World Economic Outlook we project global growth in 2020 to fall to -3 percent. This is a downgrade of 6.3 percentage points from January 2020, a major revision over a very short period. This makes the Great Lockdown the worst recession since the Great Depression, and far worse than the Global Financial Crisis.

Pls send your comment what you expect about This depression 2020 can it will be worse than 1929  comment your opinion about the same