Warsaw, Poland – Poland will enter recession for the first time in three decades, according to the latest World Economic Outlook released by the International Monetary Fund (IMF).
Poland faces recession, unemployment rate to skyrocket in 2020
After nearly thirty years of uninterrupted economic growth, Poland’s GDP should drop by 4.6% this year, according to the IMF which had, in October, forecast a GDP growth of +3.1% in 2020. The Polish economy should pick up again next year with an projected GDP growth of +4.2% in 2021.
Boasting one of the lowest unemployment rates in the EU before the coronavirus crisis, Poland’s jobless rate is now expected to jump to 9.9% in 2020, up from more than 6 percentage points compared to previous predictions.
Poland was one of the rare countries not to fall into recession in 2009.
Czech, Slovak and Hungarian GDP to shrink as well
In line with previous forecasts, all Central European economies are expected to be heavily impacted by the impending economic crisis: the Czech Republic will be hit the hardest (-7.5% in 2020), followed by Slovakia (-6.2%) and Hungary (-3.1%), one of the most resilient economies in the EU.
Unemployment should rise to 7.5%, 8% and 5.4% in those three countries respectively.
Visegrad countries are, of course, no unique cases, as the Covid-19 pandemic will severely impact growth all around the world, with a global GDP drop of -3%, according to the International Monetary Fund, much worse than the 2008-2009 economic and financial crisis.
Although the global economy is projected to grow by 5.8% in 2021, the IMF’s baseline scenario “assumes that the pandemic fades in the second half of 2020 and containment efforts can be gradually unwound”. Analysts warn that “the risks for even more severe outcomes […] are substantial”.
Developed economies plunge, developing Asian markets resilient
The EU as a whole will enter recession in 2020, with all the bloc’s economic powerhouses in free-fall: Italy (-9.1%), Spain (-8%), France (-7.5%) and Germany (-7%). The U.K. and the U.S. too should see their GDP drop by 6.5% and 5.9% respectively this year.
Among the world’s major emerging markets, Russia (-5.5%), Brazil (-5.3%) and South Africa (-5.8%) will also enter recession before bouncing back into positive territory in 2021. India, meanwhile, should prove more resilient and continue to grow by +1.9% this year according to the IMF.
China, the epicenter of the pandemic where the virus originated from, should manage to weather the storm, according to the IMF, which forecasts a +1.2% GDP growth in 2020.