As a result of the Coronavirus outbreak, the International Monetary Fund (IMF) has revised earlier estimates for the global economy. The IMF has projected a contraction of 4.5% of the Indian economy in comparison to previous predictions. Global output is projected to decline by 4.9% in 2020, 1.9% percentage points below the IMF’s April forecast
IMF, however, predicted some recovery in global growth for 2021, “In 2021 global growth is projected at 5.4 per cent. Overall, this would leave 2021 GDP some 6½ percentage points lower than in the pre-COVID-19 projections of January 2020,” said IMF chief economist Gita Gopinath.
“The adverse impact on low-income households is particularly acute, imperilling the significant progress made in reducing extreme poverty in the world since the 1990s,” the IMF added, about 2020’s estimates.
IMF chief economist Gita Gopinath on June 24, said, “Compared to our April World Economic Outlook forecast, we are now projecting a deeper recession in 2020 and a slower recovery in 2021. Noting that these projections imply a cumulative loss to the global economy over two years of over $12 trillion from the crisis.”
She said that 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 a supply potential.
In its report, IMF said that all countries—including those that have seemingly passed peaks in infections—should ensure that their health care systems are adequately resourced.
IMF urged countries for cooperation, “All countries—including those that have seemingly passed peaks in infections—should ensure that their health care systems are adequately resourced. The international community must vastly step up its support of national initiatives, including through financial assistance to countries with limited health care capacity and channelling of funding for vaccine production as trials advance, so that adequate, affordable doses are quickly available to all countries.”