The International Monetary Fund said Friday that the global economy has fallen into a recession, with economic and social activities increasingly curtailed in many countries in an effort to contain the spread of the coronavirus pandemic.
"It is now clear that we have entered a recession as bad or worse" than that seen in the aftermath of the 2008 global financial crisis, IMF chief Kristalina Georgieva said at a press conference.
But she said a recovery is projected in 2021, and that it may be "a sizable rebound" if countries succeed with fully containing the virus and prevent liquidity problems from becoming a solvency issue.
"A key concern about a long-lasting impact of the sudden stop of the world economy is the risk of a wave of bankruptcies and layoffs that not only can undermine the recovery, but can erode the fabric of our societies," she said.
The global economy contracted by 0.1 percent in 2009 in the aftermath of the financial crisis, triggered by the collapse of Lehman Brothers Holdings Inc. the previous year. If the world economy shrinks this year, it would be the first time since 2009.
The United States is also in a recession, along with the rest of the advanced economies as well as many emerging and developing economies, Georgieva said.
But she said she cannot tell how severe the downturn could be and that the IMF is now working to come up with new projections for 2020.
The virus shows no signs of abating, with confirmed infection cases now exceeding 550,000 worldwide. The United States has emerged as the country reporting the largest number of infections, surpassing China which was the first to be hit by the epidemic.
Travel restrictions have been imposed worldwide, while businesses, shops and schools have closed down as part of efforts to stop the spread of the contagious virus.