The global economy is estimated to drop by 3% this year, before rebounding by 5.8% in 2021, the International Monetary Fund (IMF) said today, stressing that "this crisis is like no other."
In the past 60 years, the global economy decreased only once. In 2009, when Bitcoin started its journey, the global GDP slipped by 1.73%.
This time, advanced economies, such as the US, Euro Area and others might see the strongest drop, while the emerging markets and developing economies will suffer less and rebound faster, the IMF said in its latest World Economic Outlook, published today.
Marcus Swanepoel, co-founder and CEO of crypto exchange Luno, warned recently that in case of a massive global recession even the long-term hodlers may be forced to sell their to survive.
"The forecast for the global economy laid out in this report reflects our current understanding of the path of the pandemic and the public health measures required to slow the spread of the virus, protect lives, and allow health care systems to cope," Gita Gopinath, the Economic Counselor and Director of the Research Department at the IMF said in the report.
According to her, a partial recovery is projected for 2021, with above trend growth rates, but the level of GDP will remain below the pre-virus trend, with considerable uncertainty about the strength of the rebound.
"Much worse growth outcomes are possible and maybe even likely," Gopinath added.
The IMF says that this crisis will need to be dealt with in two phases:
- a phase of containment and stabilization
- the recovery phase.
Meanwhile, the Counselor also noted that in emerging markets and developing economies with large informal sectors, new digital technologies may be used to deliver targeted support. As reported by Cryptonews.com, central bank digital currencies (CBDCs) can make the monetary system faster and more efficient. (Learn more: Can CBDC Help Recover From Coronavirus Recession And Lead To Bitcoin?)
