The International Monetary Fund (IMF) expects the global economy to contract by as much as 3% this year it says, far exceeding the 0.1% contraction recorded during 2009’s recession.
The IMF’s World Economic Outlook, penned by chief economist, Gita Gopinath warns that, “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… this is a crisis like no other.” The World Trade Organisation has a similar consensus, with expectations that the global contraction in trade will be between 13-32% over the course of 2020.
Goldman Sachs goes further, anticipating a 35% squeeze in the period April – June, with the expectation that a new wave of coronavirus cases could emerge as economies open up again and the population returns to work.
Bloomberg’s Mike McGlone says this is good news for gold – and a compelling reason to buy now. The senior market analyst said, “When the history of 2020 is told, we expect gold to have been a main beneficiary of unprecedented monetary stimulus that typically supports stock prices.”