Following a virtual summit on March 26, the G20 is now working to devise an action plan for addressing both the COVID-19 pandemic and the resulting economic crisis. While the task today is more difficult than it was after the 2008 global financial crisis, we know from past disasters that solidarity is the only solution.
SEOUL – The COVID-19 pandemic has cast a pall over the global economy, making it impossible to anticipate even the near future. Restrictions on cross-border movements, along with national lockdowns, are rapidly reducing global production and consumption, and disrupting value chains. Growing uncertainties are creating a vicious circle, as the contraction in the real economy spills over into the financial sector, in turn reducing credit to non-financial firms. There are good reasons to worry that the economic shocks caused by COVID-19 could be greater and longer lasting than those caused by the 2008 global financial crisis, perhaps even the Great Depression of the 1930s.
SEOUL – The COVID-19 pandemic has cast a pall over the global economy, making it impossible to anticipate even the near future. Restrictions on cross-border movements, along with national lockdowns, are rapidly reducing global production and consumption, and disrupting value chains. Growing uncertainties are creating a vicious circle, as the contraction in the real economy spills over into the financial sector, in turn reducing credit to non-financial firms. There are good reasons to worry that the economic shocks caused by COVID-19 could be greater and longer lasting than those caused by the 2008 global financial crisis, perhaps even the Great Depression of the 1930s.