The International Monetary Fund (IMF) projected Wednesday a “deeper recession” this year and a “slower recovery” in 2021 as a result of the coronavirus pandemic. According to the IMF’s World Economic Outlook (WEO), global output is projected to decline by 4.9 percent in 2020; 1.9 percentage points below the April forecast, followed by a “partial recovery” with growth at 5.4 percent in 2021.
“These projections imply a cumulative loss to the global economy over two years (2020-21) of over USD 12 trillion from this crisis. “The downgrade from April reflects worse than anticipated outcomes in the first half of this year, an expectation of more persistent social distancing into the second half of this year, and damage to supply potential,” it noted.
It projected a “synchronized deep downturn in 2020 for both advanced economies (-8 percent) and emerging market and developing economies (-3 percent; -5 percent if excluding China), and over 95 percent of countries are projected to have negative per capita income growth in 2020.” According to the WEO, the Middle East and Central Asia’s GDP growth is expected to contract by 4.7 percent in 2020 before growing 3.3 percent in 2021.
Furthermore, the US economy is expected to shrink by eight percent while euro area output could decline by 10.2 percent, according to the WEO. “The COVID-19 pandemic pushed economies into a Great Lockdown, which helped contain the virus and save lives, but also triggered the worst recession since the Great Depression,” the report stressed. It noted that the pandemic “has had a more negative impact than anticipated, and the recovery is projected to be more gradual amidst a lot of uncertainty”.
Read Today's News TODAY... on our Telegram Channel click here to join and receive all the latest updates t.me/thetimeskuwait
