In its annual World Economic Outlook released on Tuesday, the International Monetary Fund (IMF) predicted that the global economy would experience its worst recession since the Great Depression, predicting an overall contraction by 3% as a direct result of the ongoing COVID-19 pandemic—a stark contrast to the originally-predicted 3.3% growth that had originally been projected in January. Considering the Great Recession that swept much of the global economy off of its feet a decade ago only led to a global gross domestic product (GDP) decline of 0.1%, the potential impacts of what is know being dubbed “The Great Lockdown” has the potential to stifle the world’s economy unlike anything ever seen before.

“It is very likely that this year the global economy will experience its worst recession since the Great Depression, surpassing that seen during the global financial crisis a decade ago. The Great Lockdown, as one might call it, is projected to shrink global growth dramatically,” said chief economist Gita Gopinath. “A partial recovery is projected for 2021, with above trend growth rates, but the level of GDP will remain below the pre-virus trend, with considerable uncertainty about the strength of the rebound. Much worse growth outcomes are possible and maybe even likely.”

The IMF also warns of the possibility for a credit crunch—where banks see a significantly reduced amount of money that they have available to lend as credit—should the “cracks” in the global financial system lead to companies suspending their payments to banks. In a statement, the organization said: “These developments [COVID-19 pandemic] have raised the risk that the inability of borrowers to service their debts would put pressure on banks and cause credit markets to freeze up. A prolonged period of dislocation in financial markets could trigger distress among financial institutions, which, in turn, could lead to a credit crunch for nonfinancial borrowers, further exacerbating the economic downturn.”

Nevertheless, it is important to understand that there is no full-on global economic meltdown just yet. The true effects of the COVID-19 pandemic on the global economy remains to be seen.