IMF’s managing director, Kristalina Georgieva, had already warned that the April forecast had been overtaken by events, and that the likely path of the global economy was looking worse now predicts a decline of almost 5% in 2020, substantially worse than its forecast only 10 weeks ago in April
International Monetary Fund (IMF) has sharply lowered its forecast for global growth this year, saying the coronavirus pandemic is causing a much steeper recession and a slower recovery than initially expected. IMF predicts that the global economy will shrink 4.9 per cent this year, significantly worse than the 3 per cent drop it had estimated in its previous report in April.
Global growth is projected at –4.9 percent in 2020, 1.9 percentage points below the April 2020 World Economic Outlook (WEO) forecast. The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast. In 2021 global growth is projected at 5.4 percent. Overall, this would leave 2021 GDP some 6½ percentage points lower than in the pre-COVID-19 projections of January 2020. The adverse impact on low-income households is particularly acute, imperiling the significant progress made in reducing extreme poverty in the world since the 1990s.
IMF’s chief economist Gita Gopinath told reporters that the global economic damage from the recession will be worse than from any other downturn since the Great Depression of the 1930s. However, the outlook is slightly rosier than those provided by the World Bank and Organization for Economic Cooperation and Development (OECD).