‘Deep recession’ forecast for 2020
It is projected that 2021 output for all advanced and developing economies, with the only exception of China, would remain below 2019 levels.
Global economic recovery from this ‘catastrophic collapse’ will likely be long and highly uncertain.
This was the sentiment of International Monetary Fund (IMF) chief economist Gita Gopinath who was talking about the global recession in the wake of the Covid-19 pandemic and associated lockdown.
Speaking ahead of the release of the World Economic Outlook Forecast report, Gopinath said that, while the IMF expects global growth to rebound somewhat in 2021, it is projected that output for all advanced and developing economies, with the only exception of China, would remain below 2019 levels.
“We continue to project a deep recession in 2020 with global growth projected to be -4.4%,’ said Gopinath.
“This is a small upgrade relative to our June numbers. We expect growth to rebound partially in 2021, coming back to 5.2%.”
She said there are ‘broad risks’ to the upside and downside of economic recovery.
“On the upside, we could have positive development in terms of treatments and vaccines that could hasten the end of this health crisis.
“And we could also have more policy support that would help. But there are many downside risks.
“We could have worse news on the health front and we could have greater financial turmoil at a time when debt is at the highest level in recorded history.
“And we have rising geopolitical tensions that could also derail the recovery,” she said.
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