IMF Revises Global Outlook Forecasts Lower for 2020, 2021
Arslan Butt • 1 min read
The IMF has revised its global economic output forecasts lower for this year as the coronavirus pandemic rages on, hampering economic activity to a greater extent than previously estimated. According to the latest estimates, the IMF now expects the global economy to contract by 4.9% this year, far higher than the previous forecast for a 3% contraction.
Economic recovery in 2021 will also be more subdued than previously expected, with the IMF expecting the economic growth to rebound to 5.4% now, as opposed to its earlier forecast for 5.8% growth made back in April. However, a resurgence of the outbreak once again next year could bring down the growth forecast to as low as 0.5% in 2021.
Addressing a news conference, IMF chief economist Gita Gopinath commented, “We are definitely not out of the woods. We have not escaped the Great Lockdown. Given this tremendous uncertainty, policymakers should remain vigilant.”
The IMF as well as several other economists have stated that the economic downturn driven by the pandemic is the most severe recession since the Great Depression of 1930s. However, massive stimulus measures by governments and central banks have so far helped protect economies from further collapse so far.