2020-03-23 Bloomberg Businessweek

E C O N O M I C S

26

Edited by

Cristina Lindblad

● Countries must overcome

nationalist impulses and

mistrust to coordinate a global

response to the virus

WhatIf

Is NotEnough?

After a halting start, governments and central

banks have finally been coming to grips with the

economic consequences of the coronavirus out-

break. The Covid-19 disease is more than a health

crisis. What seemed like an alarmist scenario a

month ago—a global recession—now appears a cer-

tainty. And the extreme measures needed to limit

infections may intensify the slump.

Maurice Obstfeld, the International Monetary

Fund’s former chief economist, says you’d have to

be optimistic to believe we’re experiencing some-

thing akin to the recession caused by the financial

crisis, when global output in 2009 shrank 0.1%,

according to IMF data. As governments restrict

travel and close restaurants while manufacturers

prepare for temporary shutdowns, major econo-

mies are now experiencing a “hard stop,” which

could inflict a toll that may be closer to the 9%

contraction Greece endured at the height of its

sovereign debt crisis, he says. “We are seeing a

collapse of economicactivityascountriestryto

get a handle on thisdisease,”Obstfeldsays,point-

ing to the plungeinindustrial production and

ILLUSTRATION BY WOSHIBAI. DATA: COMPILED BY BLOOMBERG

Bloomberg Businessweek March 23, 2020

Whatever It Takes