The International Monetary Fund (IMF) on Tuesday has dramatically downgraded its outlook on the global economic growth, projecting a sharp contraction for this year amid “exceptionally high” uncertainty.
“The COVID-19 pandemic is inflicting high and rising human costs worldwide, and the necessary protection measures are severely impacting economic activity. As a result of the pandemic, the global economy is projected to contract sharply by 3 percent in 2020, much worse than during the 2008–09 financial crisis,” said the IMF.
In January, the IMF had forecast that the global economy would expand 3.3 percent this year and 3.4 percent in 2021.
“It is very likely that this year the global economy will experience its worst recession since the Great Depression, surpassing that seen during the global financial crisis a decade ago,” said IMF’s chief economist Gita Gopinath.
She then added: “Assuming the pandemic fades in the second half of 2020 and that policy actions taken around the world are effective; we project global growth in 2021 to partially rebound to 5.8 percent.”
The IMF, which dubbed the current crisis “the Great Lockdown” and “a crisis like no other,” said that the risks for even more severe outcomes are substantial. It has called for the necessity of effective policies.
According to the fund, it had received “an unprecedented number of calls for emergency funding,” with more than 90 nations (out of its 189 members) having asked for financial support.