This post is a summary of the chapter one with the title of, "The Great Lockdown"of the book with the title of, "World Economic Outlook," published in April 2020 at https://www.imf.org/en/Publications/WEO/Issues/2020/04/14/weo-april-2020
The world has changed dramatically, a pandemic scenario had been raised as a possibility in previous discussions, but none of us had a meaningful sense of what it would look like. We now encounter a grim reality, where exponential growth of contagion means 100 infected become 10,000 in a matter of a few days. This crisis is like no other. It is very likely that this year the global economy will experience its worst recession since the Great Depression. The Great Lockdown, as one might call it, is projected to shrink global growth dramatically. A recovery is projected for 2021. This crisis will need to be dealt with two phases: a phase of containment and stabilization followed by the recovery phase. In both phases public health and economic policies have crucial roles to play. Quarantines and lockdowns are critical for slowing transmission, giving the health care system time to handle the surge in demand and buying time for researchers to try to develop therapies. While the economy is shut down, policymakers will need to ensure that people are able to meet their needs and that business can pick up once the acute phases of the pandemic pass. Advanced economieswith well-equipped health care systems, and the privilege of issuing reserve currencies are relatively better placed to weather this crisis. Several emerging market without similar assets will need help from bilateral creditors and international financial institutions. Multilateral cooperation will be key. In addition to sharing equipment and expertise to reinforce health care systems, a global effort must ensure that when therapies and vaccines are developed both rich and poor nations have immediate access. Finally, it is worth thinking about measures that could be adopted to prevent something like the pandemic from happening again. Greater and more automatic information exchange on unusual infection, earlier and more widespread deployment of testing, building global stockpiles of personal protective equipment, could enhance the security of both public health and the global economy. Global growth is projected at -3.0% in 2020, an outcome far worse than during the 2009 global financial crisis. As of early April 2020 the path of the COVID-19 pandemic remains uncertain. Strong containment efforts in place to slow the spread of the virus may need to remain in force for longer than the first half of the year if the pandemic proves to be more persistent than assumed. Effective policies are essential to forestall worse outcomes. As a first priority, resources should be made available for health care systems to cope with the surging need for their services. This means expanding public spending on additional testing, hiring medical professionals, purchasing protective equipment and ventilators, and expanding isolation wards in hospitals. Beyond strengthening health care systems, policies will need to limit the propagation of the health crisis to economic activity by shielding people and firms affected by necessary containment measures, minimizing persistent scarring effects from the unavoidable severe slowdown, and ensuring that the economic recovery can begin quickly once the pandemic fades. Commodity prices have decreased sharply since October 2019, hit hard by the COVID-19 outbreak in late January. Oil prices colapsed further in March as the OPEC coalition broke down, unable to reach agreement on how to react to the weak oil demand outlook. The IMF's food and beverage price index increased by 0.1% since October 2019 driven by cereals, orange, seafood and coffee, which recorded substantial price increases, while the prices of meat, tea, wool and cotton declined. Food prices are projected to decrease by 2.6% in 2020. Below the GDP growth in 2019 from the greatest growth to the lowest of each list. The first list is for countries in the Americas and the other is for the rest of the world.
GDP 2019 in PanAmerican countries Rest of the World
Guyana 4.7% Ethiopia 9.0%
Guatemala 3.6% Vietnam 7.0%
Colombia 3.3% China 6.1%
Panama 3.0% Philippines 5.9%
Bolivia 2.8% Egypt 5.6%
Honduras 2.7% Ireland 5.5%
U.S.A 2.3% India 4.2%
Peru 2.2% Portugal 2.2%
Costa Rica 2.1% South Korea 2.0%
Canada 1.6% Spain 2.0%
Brazil 1.1% Australia 1.8%
Chile 1.1% U.K. 1.4%
Paraguay 0.2% Sweden 1.2%
Ecuador 0.1% Japan 0.7%
Mexico -0.1% Germany 0.6%
Argentina -2.2% Italy 0.3%
Nicaragua -3.9% South Africa 0.2%
Venezuela -35.0%
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