3%. That is how much the world’s economy decreased as it enters recession. But in this scenario, it is the more advanced economies that will be more severely punished. Portugal and Spain are included in this group and should suffer a drop that more than doubles that of the global one: 8%.
This is one of the impacts on the world’s economy generated by the Covid-19 pandemic, according to the IMF (International Monetary Fund) in its latest report «World Economic Outlook» launched this Tuesday.
The data confirm and quantify the alert given by Kristalina Georgieva, IMF’s Managing Director, last week «global growth will become significantly negative in 2020». The report further adds that this result «is a lot worse than that of the 2009 global financial crisis».
The more advanced European economies – where the GDP drop (at around 7.3%) is expected to be more severe than the global average – should register some of the biggest drops, since, according to the study, that is «where several economies are facing general outbreaks and implementing containment measures». Besides Portugal and Spain, the United Kingdom should also contract 6.5% and Germany 7%. It is estimated that Italy should be one of the countries in Europe whose economy will suffer the most with a 9.1% drop, but Greece is expected to have the most severe decrease at 10%.
2021 will be a year to recover
Despite this year’s negative balance, 2021 should be a recovery year, according to the IMF. The world’s economy should rise above this crisis by growing 5.8% and the European economy should grow 4.5%.
The IMF’s calculations point out to Portugal having a GDP growth higher than the European average, at 5%. Spain should have a slightly lower growth when compared to the European average, at 4.3%. Projections for Italy and Greece, the economies which will suffer the most, are also positive – 4.8% and 5.1% respectively.
Despite the expected fast recovery, it is unlikely that it will make up for the drops in 2020. This means that it should take years for the economies to fully recover from the damage caused by the pandemic crisis.