(June 12): In something of a Western-centric statement, the International Monetary Fund (IMF) on April 14 said that as a consequence of the Covid-19 pandemic, or rather the measures imposed to contain the disease’s spread, this year the world will experience its worst economic contraction since the Great Depression of the 1930s.
In fairness, the IMF did go on to qualify its Great Depression comments by pointing out that while the world economy will contract by 3%, most Asian economies will finish the year still in positive territory — still an amazing feat given the scale of economic shutdown currently in motion. If we take a pandemic scenario that sees global economic resumption well under way in the second quarter as the IMF does, China this year is estimated to book GDP growth of 1.2%, India 1.9% and Indonesia 0.5%.
To adapt IMF’s comments: this is the worst downturn since Deng Xiaoping began opening the economy in the 1980s (for China); the worst challenge since the 1991 balance of payments crisis (for India); and the biggest contraction since the 1997-98 East Asian Economic Crisis (for Indonesia). This is certainly bad — remember the latter felled the Suharto dictatorship and precipitated race riots in which perhaps thousands died — but it is not the Great Depression.