Covid-19: Risk of a second Great Depression grows by the day

Uncontained pandemics, insufficient economic responses and geopolitical unrest may be enough to trigger a runaway financial-market meltdown

24th March, 2020
Covid-19: Risk of a second Great Depression grows by the day
Donald Trump gives a coronavirus briefing at the White House. The deterioration of Sino-American relations is accelerating as each side blames the other for the scale of the Covid-19 pandemic. Picture: Getty

The shock to the global economy from Covid-19 has been both faster and more severe than the 2008 global financial crisis (GFC) and even the Great Depression. In those two previous episodes, stock markets collapsed by 50 per cent or more, credit markets froze up, massive bankruptcies followed, unemployment rates soared above 10 per cent, and GDP contracted at an annualised rate of 10 per cent or more. But all of this took around three years to play out.

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