The International Monetary Fund on Tuesday said forecasts for the global economy were “somewhat less dire” as wealthy countries and China rebounded more quickly than expected from coronavirus lockdowns but warned that the outlook was worsening for many emerging markets.
The IMF forecast a 2020 global contraction of 4.4 percent in its latest World Economic Outlook, an improvement over a 5.2 percent contraction predicted in June, when business closures reached their peak. But it is still the worst economic crisis since the 1930s Great Depression, the IMF said.
Many economies have started to recover faster than anticipated after reopening from their lockdowns but with the COVID-19 pandemic continuing to spread, the global economy’s ascent back to pre-pandemic levels remains prone to setbacks, the outlook said.
Screenshot of IMF World Economic Outlook
“These are difficult times, yet there are some reasons to be hopeful,” Gita Gopinath, economic counsellor and director of research, was quoted as saying in the outlook report, referring to progress made in treatments and vaccine trials.
Compared with the previous outlook IMF made in June, the second quarter GDP growth in large advanced economies were slight better and China’s return to growth was stronger than expected, the report said, noting there are signs of a more rapid recovery in the third quarter.