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Gita Gopinath, chief economist and director of the Research Department at the International Monetary Fund. Photo: Olivier Douliery/AFP via Getty Images

The coronavirus pandemic will bring about the worst economic downturn since the Great Depression, the International Monetary Fund projected Tuesday in its latest world economic outlook.

Why it matters: The organization expects a recession "far worse" than the 2008 financial crisis. In a revision to its earlier forecast, the IMF said global GDP growth will fall to -3% this year, a drastic downgrade from its forecast of +6.3% in January.

By the numbers: Global GDP will face a cumulative loss of about $9 trillion — larger than the economies of Japan and Germany combined.

  • Growth in advanced economies is projected to be -6.1%.
  • Emerging markets are projected to have growth rates of -1.0%, and -2.2 percent if China is excluded.
  • Income per capita is expected to shrink for over 170 countries.

Zoom in: The United States is projected to experience -5.9% growth, while the eurozone will see -7.5%. Italy, the country in Europe hit the hardest by the pandemic, is projected to experience -9.1% growth.

Yes, but: The IMF projects growth will partially rebound to +5.8% in 2021 if the pandemic fades in the second half of 2020 and if "policy actions taken around the world are effective in preventing widespread firm bankruptcies, extended job losses, and system-wide financial strains," according to the report.

  • But it projects economic activity will still remain below what was forecasted for 2021 before the outbreak.

The bottom line: The IMF urged policymakers around the world to keep using lockdown policies to stop the virus from spreading, noting that they're the best way to eventually be able to resume normal economic activities.

  • "In this sense, there is no trade-off between saving lives and saving livelihoods," the report states.

Go deeper

Senate confirms retired Gen. Lloyd Austin as defense secretary

Photo: Greg Nash-Pool/Getty Images

The Senate voted 93-2 on Friday to confirm retired Gen. Lloyd Austin as secretary of defense. Sens. Mike Lee (R-Utah) and Josh Hawley (R-Mo.) were the sole "no" votes.

Why it matters: Austin is the first Black American to lead the Pentagon and President Biden's second Cabinet nominee to be confirmed.

House will transmit article of impeachment to Senate on Monday, Schumer says

Photo: Drew Angerer/Getty Images

Senate Majority Leader Chuck Schumer (D-N.Y.) announced that the House will deliver the article of impeachment against former President Trump for "incitement of insurrection" on Monday.

Why it matters: The Senate is required to begin the impeachment trial at 1pm the day after the article is transmitted.

Dan Primack, author of Pro Rata
2 hours ago - Politics & Policy

Private equity bets on delayed tax reform in Biden administration

Illustration: Brendan Lynch/Axios

In normal times, private equity would be nervous about Democratic Party control of both the White House and Congress. But in pandemic-consumed 2021, the industry seems sanguine.

Driving the news: Industry executives and lobbyists paid very close attention to Treasury Secretary nominee Janet Yellen's confirmation hearings this week, and came away convinced that tax reform isn't on the near-term agenda.

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