The World Economic Outlook by IMF: Global Economy Projected to Contract by 3% in 202020-04-2020
Due to the COVID-19 pandemic, the 2020 Spring Meetings of the International Monetary Fund (IMF) and the World Bank Group took place from April 14 to April 17 in a virtual format, and a new issue of World Economic Outlook was released.
According to the report, the world is undergoing the worst economic downturn since the Great Depression, and far worse than the Global Financial Crisis. The global economy is projected to contract by 3 percent in 2020, a downgrade of 6.3 percentage points from January 2020. The IMF projects global growth in 2020 to fall to -3 percent, and for the first time since the Great Depression both advanced economies and emerging market and developing economies are in recession. The cumulative loss to global GDP over 2020 and 2021 from the pandemic crisis could be around 9 trillion dollars, greater than the economies of Japan and Germany, combined.
According to IMF projections, global growth in 2021 will rebound to 5.8 percent. Given the extreme uncertainty around the prospects for the pandemic, it may not recede in the second half of this year, and in such cases global GDP would fall by 6 percent in 2020, and if the pandemic continues into 2021, global GDP may fall by 2.2 percent next year.
In the end, the IMF urges countries to continue to spend generously on their health systems, perform widespread testing, and refrain from trade restrictions on medical supplies. A global effort must ensure that when therapies and vaccines are developed both rich and poor nations alike have immediate access. And while the economy is shut down, policymakers will need to ensure that people are able to meet their needs.