The global economy this year is likely to face the worst financial crisis since the Great Depression amid the COVID-19 pandemic, IMF said in a World Economic Outlook report.

According to its forecasts, the world economy will shrink 3% in 2020.

"It is very likely that this year the global economy will experience its worst recession since the Great Depression, surpassing that seen during the global financial crisis a decade ago. The Great Lockdown, as one might call it, is projected to shrink global growth dramatically,” said IMF chief economist Gita Gopinath.

According to IMF estimates, if in January global GDP growth in 2021 was to reach 3.4%; this indicator has now been revised to 5.8%. “A partial recovery is projected for 2021, with above trend growth rates, but the level of GDP will remain below the pre-virus trend, with considerable uncertainty about the strength of the rebound. Much worse growth outcomes are possible and maybe even likely,” Gopinath noted.

The IMF, who called the current crisis The Great Lockdown, said that this is a crisis, not one like any other. There is serious uncertainty regarding the duration and intensity of the economic shock, and stimulating economic activity is a more difficult task given the necessary policies of social distance and isolation.

The IMF said it received an unprecedented number of requests for emergency financing. Of the 189 members, more than 90 applied for financial support.

Recent IMF forecasts suggest that the US economy will shrink 5.9% this year. In comparison, the euro zone is expected to shrink by 7.5%, but China is seen growing by 1.2% in 2020.

The economic situation will be especially difficult in Italy and Spain, where GDP is set to contract by 9.1% and 8%, respectively. These two countries are the worst hit in Europe by COVID-19.

The IMF advises countries to focus primarily on the health crisis, by spending on testing, medical equipment and other health care-related costs.

Governments should provide tax deferrals, subsidies for wages and remittances to the most affected citizens and firms; and also prepare for lifting restrictive measures.