The COVID-19 recession was a global economic recession caused by COVID-19 lockdowns. The recession began in most countries in February 2020. After a year of global economic slowdown that saw stagnation of economic growth and consumer activity, the COVID-19 lockdowns and other precautions taken in early 2020 drove the global economy into crisis. Within seven months, every advanced economy had fallen to recession.

The first major sign of recession was the 2020 stock market crash, which saw major indices drop 20 to 30% in late February and March. Recovery began in early April 2020; by April 2022, the GDP for most major economies had either returned to or exceeded pre-pandemic levels and many market indices recovered or even set new records by late 2020.

The recession saw unusually high and rapid increases in unemployment in many countries. By September-October 2020, where every advanced & emerging economy had already fallen into a recession or depression more than 10 million unemployment cases had been filed in just the United States alone swamping state-funded unemployment insurance computer systems and processes. The United Nations (UN) in April 2020 had also predicted that global unemployment would wipe out 6.7% of working hours globally in the second quarter of 2020—equivalent to 195 million full-time workers. In some countries, unemployment was expected to be around 10%, with more severely affected nations from the pandemic having higher unemployment rates. Developing countries were also affected by a drop in remittances and exacerbating COVID-19 pandemic-related famines.

The recession and the accompanying 2020 Russia–Saudi Arabia oil price war led to a drop in oil prices; the collapse of tourism, the hospitality industry, and the energy industry; and a downturn in consumer activity in comparison to the previous decade. The 2021–2023 global energy crisis was driven by a global surge in demand as the world exited the early recession caused by pandemic-related lockdown measures, particularly due to strong energy demand in Asia. This was then further exacerbated by the reaction to escalations of the Russo-Ukrainian War, culminating in the Russian invasion of Ukraine and the 2022 Russian debt default. Modeling by the World Bank suggests that in some regions a full recovery would not be able to be achieved until 2025 or beyond.

After the 2008 financial crisis, there was a large increase in corporate debt, rising from 84% of gross world product in 2009 to 92% in 2019, or about $72 trillion. In the world's eight largest economies—China, United States, Japan, United Kingdom, France, Spain, Italy, and Germany—total corporate debt was about $51 trillion in 2019, compared to $34 trillion in 2009. If the economic climate worsens, companies with high levels of debt run the risk of being unable to make their interest payments to lenders or refinance their debt, forcing them into restructuring. The Institute of International Finance forecast in 2019 that, in an economic downturn half as severe as the 2008 crisis, $19 trillion in debt would be owed by non-financial firms without the earnings to cover the interest payments on the debt they issued. The McKinsey Global Institute warned in 2018 that the greatest risks would be to emerging markets such as China, India, and Brazil, where 25–30% of bonds have been issued by high-risk companies.

During 2019, the IMF reported that the world economy was going through a "synchronized slowdown", which entered into its slowest pace since the 2008 financial crisis. 'Cracks' were showing in the consumer market as global markets began to suffer through a 'sharp deterioration' of manufacturing activity. Global growth was believed to have peaked in 2017, when the world's total industrial output began to start a sustained decline in early 2018. The IMF blamed 'heightened trade and geopolitical tensions' as the main reason for the slowdown, citing Brexit and the China–United States trade war as primary reasons for slowdown in 2019, while other economists blamed liquidity issues.

In April 2019, the U.S. yield curve inverted, which sparked fears of a 2020 recession across the world. The inverted yield curve and China–U.S. trade war fears prompted a sell-off in global stock markets during March 2019, which prompted more fears that a recession was imminent. Rising debt levels in the European Union and the United States had always been a concern for economists. However, in 2019, that concern was heightened during the economic slowdown, and economists began warning of a 'debt bomb' occurring during the next financial crisis. Debt in 2019 was 50% higher than that during the 2008 financial crisis. Economists^[who?] have argued that this increased debt is what led to debt defaults in economies and businesses across the world during the recession. The first signs of trouble leading up to the collapse occurred in September 2019, when the US Federal Reserve began intervening in the role of investor to provide funds in the repo markets; the overnight repo rate spiked above an unprecedented 6% during that time, which would play a crucial factor in triggering the events that led up to the crash.^{[failed verification]}

From 2018 to early 2020, U.S. President Donald Trump set tariffs and other trade barriers on China with the goal of forcing it to make changes to what the U.S. described as "unfair trade practices". Among those trade practices and their effects had been the growing trade deficit, the theft of intellectual property, and the forced transfer of American technology to China.