Economic consequences of the Corona-pandemic
Due to the recent development of the Corona pandemic, the International monetary Fund (IMF) is forecasting the most severe global recession since around a hundred years. The economic performance of the world could fall around three percent. In January 2020, the IMF projected global growth of 3.3 percent. This results in a deviation of more than six percent within three months.
The IMF expects during the year 2020, with the biggest recession in 100 years. The closure of the country draw large restrictions on international activities. The IMF predicted in a recent assessment that global growth will fall in the year 2020, three percentage points.
Reasons for the unstable Situation
The IMF announced that it is currently the world’s large uncertainties prevail. Much depends on the epidemiology of the Virus, the effectiveness of containment measures and the development of therapeutics and vaccines. The hard-to-predict factors. In many countries financial crises occur in addition to the health crisis, a slump in the prices of raw materials and more complex interactions call forth.
In the second quarter of 2020, the peak is expected
The IMF assumes that the pandemic will reach in the second quarter of 2020 their peak in the second half of the year 2020 subsides. Under this condition, the world economy would reduce growth compared to the forecast in January 2020 by 6.3 percentage points. The so-called “Great Lockdown” was thus the greatest recession since the “Great Depression” in the 1930s, and far worse than the world financial crisis from the year 2007/2008.
Light in the year 2021
The entire loss caused by the pandemic, is estimated to be around nine trillion dollars – what economies are roughly equivalent to the combined gross domestic products of the economies of Germany and Japan. If the governments of the countries, to prevent far-reaching bankruptcies and job losses, the IMF is forecasting that in the year 2021, the global growth of 5.8 percent, will increase.
The poorest countries hardest hit by the
The IMF stresses that no country in the world will remain out of this global crisis. Especially Emerging and developing countries as well as countries whose growth are dependent on tourism, will experience a particularly large disruption.
Forecast for Europe and the USA
For Germany, the IMF expects a contraction of seven per cent, and in Italy even to 9.1 percent. Overall, the IMF for Europe is forecasting a decline of 7.5 percent. For the largest economy in the world, the United States, predicts the IMF, a decline in the gross domestic product of 5.9 per cent.
IMK-economic indicator switches to red
The Institute for macroeconomics and economic research (IMK) report is now the “red alert”. The danger of Recession of the IMK economic sentiment indicator rose to almost 80 percent and thus indicates a high likelihood of a recession. “The German economy will shrink with a probability bordering on certainty in the spring and in the summer quarter,” explains Professor Dr. Sebastian Dullien, the Scientific Director of IMK.
IMK provides for recovery by the end of 2020
“If all goes well, it could use end-of-year economic recovery,” stresses Dullien. A prerequisite is, however, that it is possible to loosen from the beginning of may, the contact restrictions without serious relapses. In addition, it is important to secure the purchasing power of the employees as well as possible. In addition, the state should support a stimulus program.
The reason for the rapid increase in the risk of Recession, the slump in the stock markets, gloomy mood indicators, a decline in the number of open jobs and the decline in orders from abroad were. (vb)