The deepest recession that IMF predicts will continue in 2021, pushes every nation’s finances to the limit – big or small, rich or poor.
The global economy is winding to a gradual halt since the coronavirus outbreak in Wuhan in November 2019. Now, the International Monetary Fund has warned of the impending Great Depression 2.0, as the COVID-19 outbreak pushes countries around the globe into an irreversible downturn.
Highlights! What Does IMF’s Deepest Recession Mean For The Rich And The Poor Nations Of The World?
- Greater catastrophe than the great depression
- How it impacts the poorest nations of the world?
- Devastation of low-income, emerging markets.
- What the deepest recession means for the rich manufacturing nations?
- Investor confidence at an all-time low
- Oil cuts not up to the mark, further disappoint markets
- Sellout at thrice the intensity of the 2008 financial crisis
- IMF and World Bank’s push to bring dept to a standstill
- $1 trillion War Chest to help the ones who need emergency financing
IMF’s deepest recession will push every nation’s finances to the limit – big or small, rich or poor. IMF Chief Kristalina Georgieva warned ahead of the virtual meeting due next week where 189 member nations and IMF’s sister lending institutions will discuss the way forward to maintain financial stability.

The Poor of the World hit doubly hard
The deepest recession will hit the world’s poorest countries the hardest with insufferable atrocities. The halt of the global supply chain will hit the low-income countries in Africa, South America, and Asia much harder than the North American and European counterparts despite them having a larger casualty toll.
Halt of the global supply chain hits low-income countries in Africa, South America, and Asia much harder than the richer North American and European nations.
In fact, as recently as December, the IMF had forecasted an upbeat fiscal 2020 with positive income growth for 160 countries. Now its latest forecast puts 170 countries in negative growth. Emerging, low-income markets in these developing countries had been every investor’s cup of tea. But those backers are now fearful of the times to come.
As a result, over $100 billion has already been pulled out of these markets by investors from first-world nations. To give a perspective, this amount is more than thrice the investment that these countries lost at the onset of the 2008 global financial crisis.
Greater than the Great Depression for the Rich
World’s biggest manufacturers, the EU nations, the United States, China, Taiwan, Japan, and South Korea have seen a sharp fall in the prices of commodities. 2020 is set to be exceptionally tough for these nations to maintain profitability and continue manufacturing with enough margins balancing the import of raw materials and export of finished goods.
Even if the global outbreaks of the coronavirus pandemic start to diminish by the end of the year, IMF still forecasts only a partial recovery given the fact that the low-income, emerging markets will have severely depreciated spending capacity due to economic stagnation continuing for months.
IMF forecasts only a partial recovery in 2021 given the severely depleted spending capacity the low-income, emerging markets.
Furthermore, the tentative agreement to cut oil production between Saudi-backed OPEC, Russia and other nations is well short of what the markets expected. Consequently, the decline in demand over the next few months with be greater than the decline in production, expected to be 25 percent of the normal.
Tremendous uncertainty could easily worsen
IMF also warned that the uncertain global economy could keep getting more abysmal. Moreover, the pandemic’s duration is just one of the variable parameters. Next week’s meeting which will also have World Bank President David Malpass in attendance is aiming to bring around a consensus among the 189 member nations on the debt front.
IMF wants to adopt a debt payments standstill for the next year for the poorer member countries, thus helping them free up resources to fortify healthcare structure to bounce back from the pandemic as soon as possible.
Doubling lending for 90 poor nations
IMF’s Kristalina Georgieva also stated that the international lender has a ready $1 trillion war chest in place. The funds will help the emerging markets deal with outbreaks and get back on their feet. These low-income economies maintaining spending capacity is crucial for the richer nations to keep their global businesses functioning, let alone profiteering.
Georgieva also said that IMF had received SOS calls from 90 poorer nations for emergency funds. With the proposed $100 billion finances for these low-income markets, IMF hopes to be the ladder that helps them climb back to the counter where the big manufacturers of the world are unsure if they have enough customers to keep stocking up their aisles.

Therefore, the poorest nations of the world may not be able to bounce back to their pre-pandemic per capita income levels. In turn, the rich, first-world countries will see a double whammy with stock surplus, and heightening debts. It would turn into months of loss-making manufacturing and global supply chain.
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