'The Great Lockdown': IMF Confirms Global Recession

IMF: “The Great Lockdown is the worst economic downturn since the Great Depression, and far worse than the Global Financial Crisis [of 2008].”

AccessTimeIconApr 14, 2020 at 2:11 p.m. UTC
Updated Sep 14, 2021 at 8:28 a.m. UTC

The coronavirus economic crisis officially has a name: the Great Lockdown. 

“The Great Lockdown is the worst economic downturn since the Great Depression, and far worse than the Global Financial Crisis [of 2008],” International Monetary Fund (IMF) Chief Economist Gita Gopinath said on Tuesday. 

She projected the global economy will contract by 3 percent in 2020, due to $9 trillion in losses. The United States is expected to decline to roughly -6 percent growth, as are other nations in the advanced economy group. Gopinath said this year’s losses will “dwarf” the global financial crisis 12 years ago.

CoinDesk - Unknown

"For the first time since the Great Depression both advanced economies and emerging market and developing economies are in recession," Gopinath said. 

Furthermore, the IMF projected that vulnerable oil-exporting countries, like Iraq, will “be forced to make aggregate cuts,” according to IMF Research Director Gian Maria Milesi-Ferretti. For example, the IMF predicts the Iraqi economy will contract to -4.7 percent growth this year, down roughly 8 percentage points from 2019’s growth rate of 3.9 percent, while the Iranian economy will contract to -6 percent growth this year.

CoinDesk - Unknown

Overall, the IMF is encouraging debtors to forgive lenders and for leaders to cooperate on joint efforts to prevent de-globalization. The IMF said more than 90 of its 189 member states have requested financial support.

“We’re projecting for economic activity to still be below pre-virus levels in 2021,” said Gopinath. “This is a deep recession that involves insolvency issues and unemployment rates going up dramatically.”

Gopinath said nations with access to private-sector digital payment systems should use them to distribute aid and stimulus packages. Although she didn’t specify technologies by name, the U.S. Treasury is already working with fintech giants including PayPal and Square while Kenya relies on the mobile money product M-Pesa to decrease in-person transactions.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Investing in the Future of the Digital Economy
October 18-19 | Spring Studio, NYC