The IMF’s global economic outlook projected what is called a “deep recession” in its latest, unsurprising, but painful prognosis, with global growth expected to fall to -4.4%.
Prior to WEO’s predictions, IMF chief economist Gita Gopinath said:
“So we continue to project a deep recession in 2020, with global growth projected at -4.4%, a small upgrade compared to the June figures. In 2021, growth is expected to partially rebound and return to 5.2%. However, our forecast output, excluding China, is well below the level of 2019 until 2021, with the exception of China, all developed and emerging economies and developing economies. So we can see that recovery from this catastrophic collapse is long and even very uncertain.
Gospinath argued that as the global economy tries to bounce back from the Covid turmoil, there are not only challenges that it has yet to face, but there are also real opportunities for the situation to improve.
“There are a wide range of risks to the advantages and disadvantages. The advantage is that we have achieved positive developments in terms of treatments and vaccines that could speed up the end of this health crisis. We can also provide more policy support. But there are many risks of downsides. We have got worse news in terms of health and when debt is at the highest level in recorded history, we have gained greater financial disruption. She said from her home in Boston.
She added that the road to recovery will be challenging, but she provided some suggestions on how policies can be designed to bring the economy back to its growth trajectory.
“Firstly, it is essential that fiscal and monetary policy not be withdrawn prematurely as this crisis is not over. Secondly, once new treatments and vaccines become available, much larger international collaboration is needed to end this health crisis by ensuring that sufficient scale is produced for widespread availability in all countries. And finally, it should be designed to place the economy on the path to more sustainable, inclusive and prosperous growth.”
Despite Gospinath’s careful optimistic outlook, the IMF’s red growth rate is another reason why global stocks feel burned at the start of a challenging week.
Political tension leaves a bitter taste, and Brexit and the US presidential election create opportunities for unknown shortcomings and poor emotions between the present and Christmas.
Now, pressure is put on policymakers to determine whether Lockdown Part 2 is the correct pass. The WHO stressed that blockades should be avoided if possible, saying that at the beginning of the year, a billion people had returned to poverty as a result of a decline in trade and travel. All most of us can do is protect our money and keep holding onto what is likely to be a tough winter.
