Noah Breakspear / Edge columnist
With quarantine being extended for another two weeks, people are becoming more worrisome for the global economy and the effect it will have when this is all over. Recent news has informed readers that The Great Lockdown is as bad as The Great Depression as if the depression in the 1930s was a global issue. Without properly comparing the two economic failures and the Global GDP rate at the time, people are making the current economy sound far worse than it actually is.
The International Monetary Fund released an article comparing our current financial situation to other economic upsets within the last century. The IMF stated that the global GDP has fallen so much that this lockdown is the “worst recession since the Great Depression”(IMF) and that we are facing a global financial crisis.
The article itself does an authentic job comparing recent economy shortages with the current COVID-19. It explains that the Global Financial Crisis in 2009 had an annual GDP of -0.1% while already in April 2020, we have a projected global GDP of -3.0%. It also states that as the global GDP percentage in 2019 was 2.9 meaning that we are currently looking at a global GDP decrease of -5.9%.
However, the article begins to have some bias when it compares 2020’s global GDP rate but does not mention any rates in the 1930s. In fact, the article mentions The Great Depression once near the beginning and that’s it. The remainder of the article only compares COVID-19 to other recent financial issues and then compares different countries’ GDP rates.
This has sparked more news journalists to write articles explaining how the global economy is taking heavy hits and it’s as bad as the 1930s. CTV News illustrates that this is the “worst year for the global economy since the Great Depression”(CTV), again claiming that the economy is as bad as it was during the Great Depression.
The Great Depression was a global crisis but destroyed only a couple of countries economies such as the United States, Germany, and Brazil but all were able to recover quite quickly. Each country in the 1930s faced a different financial crisis, making it impossible to compare to COVID-19 as the entire world has put the economy to a stop.
Nearer to the end of the IMF article, it states that by the second quarter in 2021, it is projected that the global GDP rate will already have risen to 5.8%, having a total increase of 8.8%. If the projection by the IMF is accurate, it means that in 2021 the global GDP percentage will be the highest it has ever been in history. This strikes more bias as the IMF explains themselves that it is predicted that in one year the economy will be back to normal. The Great Depression lasted almost five years in most countries and only ended in the United States in 1939 while The Great Lockdown, however, has barely lasted for four months.
Both of the articles mentioned and many more have claimed that COVID-19 has had such an impact on our economy that we are currently living in a modern-day Great Depression. However, without understanding the Global GDP rate of the 1930s and how different each economic downfall is, it is difficult to say they are similar. Nonetheless, the longer the global economy is at a halt, the longer it will take to recover and return to traditional day-by-day life.