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Global recession forecast as countries mull lifting virus lockdowns

Global recession forecast as countries mull lifting virus lockdowns

PARIS: The coronavirus is poised to spark a bruising global recession not seen in a century, the IMF warned Wednesday as countries considered lifting sweeping lockdowns that have crippled economies and kept billions confined to their homes.

The deadly pandemic has already killed more than 120,000 people and infected close to two million around the world since it first emerged in China late last year.

It has upended lives from New York to New Delhi to Naples as governments imposed unprecedented lockdown measures to contain the virus s devastating march, sparking fears of tipping the world economy into a slump not seen since the Great Depression.

But with deaths and infections possibly starting to plateau in some of the hardest-hit countries, debate is mounting about when — and how — to lift lockdown measures that have kept half of humanity hemmed into their homes for weeks on end.

Austria and Italy allowed some shops to reopen on Tuesday, a day after Spain allowed construction and factory workers to return to their jobs.

In the US, President Donald Trump said numbers were levelling off and the White House was set to unveil a team Tuesday tasked with reopening the economy.

France extended its nationwide stay-at-home orders for another month, while some shops in Italy refused to reopen despite the greenlight from the central government, fearing a resurgence of the virus.

Meanwhile, India extended confinement orders for its 1.3 billion people until at least May 3, a move some fear could further devastate an already battered economy.

“People are going to lose jobs, businesses are going to shut down, unemployment is going to rise and hungry people are going to die,” businessman Manoj told AFP on the deserted streets of New Delhi.

Dire economic warnings poured in on Tuesday, with the International Monetary Fund predicting the worst global downturn in a century.

It said the global economy is expected to shrink by three percent this year and predicted a 7.5-percent dive for eurozone growth.

The US economy, the world s biggest, is expected to contract by 5.9 percent.

“Much worse growth outcomes are possible and maybe even likely,” according to the IMF s latest World Economic Outlook.

“If the pandemic and containment measures last longer, emerging and developing economies are even more severely hit,” it warned, calling the global downturn “The Great Lockdown”.

But if the virus is contained and economies can begin operating again, 2021 should see a rebound of 5.8 percent, it added.

France on Tuesday said its economy was expected to shrink by eight percent, worse than previous projections, while in Britain the Office for Budget Responsibility fiscal watchdog said GDP could plummet by 13 percent.

But some countries showed signs of setting off on the long road back to normalcy.

A shopping district in Vienna drew mask-clad shoppers after the government allowed some small stores as well as hardware and gardening shops to reopen across Austria, which has been spared the worst of the virus.

Social distancing rules remained in place, however: queues were staggered and one tobacco shop only served customers on the street, while an optician asked customers to ring a bell to enter his store.

“I m simply happy,” said 75-year-old pensioner Anita Kakac, delighted to be able to go to a flower shop again.

“I just hope by God that it s not too early” to ease the lockdown, she added.

Badly affected Spain on Monday allowed construction and factory employees back to work, and police handed out face masks in Madrid metro stations.