Managing Director and Chairman of the Executive Board of the International Monetary Fund (IMF) Kristalina Georgieva said the world has now entered “a global recession” after meeting with the financial committee that represents 189 countries.
The IMF director also called to international parties “to set massive spending plans” to minimize the COVID-19 global crisis damage expected over the next few months.
Georgieva also revealed that emerging economies would need at least $2.5 Trillion in financial resources to overcome the current crisis.
A global recession could lead to depression if the economy continues to fall for a more extended period.
IMF Director says world has entered global recession
Economic recession is “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.”
Recessions could last for a few months to 1 year of the economic crash and can be felt on tumbling GDP, increasing unemployment rates and stock markets’ tendencies.
Economic depression is a sustained, long-term downturn in economic activity in one or more economies. It is a more severe economic downturn than a recession, which is a slowdown in economic activity throughout a normal business cycle.
According to the IMF, there have been four global recessions since World War II, beginning in 1975, 1982, 1991 and 2009. This last recession was the deepest and broadest of them all.
Meanwhile, the Great Depression was the worst economic downturn in the history of the industrialized world, lasting from 1929 to 1939.