April 16: The International Monetary Fund (IMF) has warned of great recession in a century and a dire outlook for the world economy ravaged by coronavirus in its latest report.

According to Aljazeera, the World Economic Outlook released by the IMF on Tuesday paints a bleak picture of world economy and the manifold financial challenges facing low-income countries.

The IMF said that the world economy’s contraction and recovery would be worse than anticipated if the coronavirus lingers, Bloomberg reported.

"For low-income countries, the challenges of this crisis are manifold," IMF Chief Economist Geeta Gopinath reportedly said at a video conference briefing where she presented the report. "They have to deal with health crises with health systems that are just not as strong."

Titled The Great Lockdown, the IMF's latest report on the global economy described the coronavirus pandemic as a crisis "like no other" and predicted that world economic output will shrink by three percent this year, before experiencing a partial rebound next year.

"It is very likely that this year, the global economy will experience its worst recession since the Great Depression, surpassing that seen during the financial crisis a decade ago," Aljazeera quoted IMF Chief Economist Gita Gopinath as saying.

IMF warned that there is extreme uncertainty around the global growth forecast. The economic fallout depends on factors that interact in ways that are hard to predict, the report said citing the pathway of the pandemic, the efficacy of containment measures, the intensity of supply chain disruptions, credit market freezes, commodity price impacts and changes in consumer behaviour.

Under the IMF’s best-case scenario, the world is likely to lose a cumulative $9 trillion in output over two years - greater than the combined gross domestic product (GDP) of Germany and Japan, said Gopinath.

The IMF's forecasts assume that outbreaks of the novel coronavirus will peak in most countries during the second quarter and fade in the second half of the year, with business closures and other containment measures gradually unwound.

A longer pandemic that lasts through the third quarter could cause a further three percent contraction in 2020 and a slower recovery in 2021, due to the "scarring" effects of bankruptcies and prolonged unemployment, the report said.

Aljazeera further reported citing the IMF that emerging and developing economies face a litany of challenges from the coronavirus pandemic, ranging from underfunded healthcare systems and burdensome debt loads to high rates of unemployment.

The report said that developing economies that are highly dependent on tourism will be hit particularly hard, while low-income countries where large portions of the working population depend on daily wages to survive require immediate intervention.

"It is important to do whatever it takes and that includes cash transfers, digital payment systems to reach those working for daily wages," Gopinath stressed.

For low-income countries with high levels of debt, Gopinath stressed the importance for creditors to stand up and provide debt relief.

"This crisis is a truly exogenous shock," she said.