Coronavirus-led recession could be as bad as 2008 crisis, IMF chief warns

The International Monetary Fund's Chief Kristalina Georgiev on Monday warned a global recession triggered by the coronavirus pandemic will be as bad as the 2008 financial crisis, if not worse, in terms of severity — but suggested the downturn could end by 2021.

In an overarching review of the novel coronavirus's impact on the global economy, Georgiev said she anticipates negative growth in 2020 and a recession "at least as bad as during the global financial crisis or worse."

"But we expect recovery in 2021," she said. "To get there, it is paramount to prioritize containment and strengthen health systems — everywhere. The economic impact is and will be severe, but the faster the virus stops, the quicker and stronger the recovery will be."

Countries around the world have implemented strict measures to slow the spread of the coronavirus, from national quarantines to school closures to restaurant and bar closures.

In the U.S., Morgan Stanley and Goldman Sachs economists are already warning the coronavirus will inflict greater economic pain than they initially forecast, plunging the country into a recession. Unemployment is expected to surge, with 80 million jobs vulnerable to the layoffs, furlough or pay cuts, according to a grim report from Moody's Analytics.

“These are extraordinary circumstances. Many countries are already taking unprecedented measures," she said. "We at the IMF, working with all our member countries, will do the same. Let us stand together through this emergency to support all people across the world.”