Monday, November 30

I.M.F. Predicts Deep Recession in 2020 and Slow Recovery in 2021


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I.M.F. Predicts Deep Recession in 2020 and Slow Recovery in 2021

The International Monetary Fund’s chief economist predicted a 4.9 percent decline in the global economy for 2020, down from the 3 percent the organization projected in April.

The Covid-19 pandemic pushed economies into a great lockdown that saved lives but also triggered the worst recession since the Great Depression. Several countries have started to recover. However, in the absence of a medical solution, the strength of this recovery is highly uncertain, and the impact across sectors and countries highly uneven. Compared to our April world economic outlook, we are now projecting a deeper recession in 2020 and a slower recovery in 2021. Global output is projected to decline by minus 4.9 percent in 2020 — which is 1.9 percentage points below our April forecast — followed by a partial recovery with growth projected at 5.4 percent in 2021. As countries reopen, the pickup is uneven. On the one hand, pent-up demand is leading to a surge in spending in some sectors like retail. On the other hand, contact-intensive sectors like hospitality, tourism and travel remain depressed. So countries that are heavily reliant on these sectors are likely to be deeply impacted for a prolonged period.

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