The International Monetary Fund (IMF) Friday officially declared that the global economy has entered recession as a result of the spread of the new coronavirus, which has shut down economic activities across the world.

IMF’s Managing Director, Kristalina Georgieva, said they have reassessed the prospect for growth for 2020 and 2021.

"It is now clear that we have entered a recession – as bad as or worse than in 2009,” she said in a news briefing on Friday.

She suggested that the global economy would only recover if countries succeed in containing the virus.

According to Georgieva, a key concern about a long- lasting impact of the sudden stop of the world economy is the risk of a wave of bankruptcies and layoffs.

This, she said, not only can undermine the recovery but can erode the fabric of global societies.

The IMF and different economists across the world had already predicted that the COVID-19 driven economic recession was likely, and inevitable at the extreme.

What does it mean?

The IMF describes a global recession as a sustained period when economic output falls and unemployment rises.

It is simply an extended period of economic decline around the world.

While there’s no official definition of a recession, such economic decline should last more than a few months, normally visible in production, employment, real income, and other indicators.

The world had last experienced recession between 2008 and 2009, when countries like the United States and those in Europe experienced a rise in unemployment, company profits fell, financial markets tumbled, and the housing sector collapsed.

The IMF had recently advocated for waiving debts for the poorest countries but the G20 Leaders’ Summit which happened virtually on Thursday never resolved anything about this in their final declaration.