Forecast for global economy ‘somewhat less dire’: IMF

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Oct 14, 2020 06:00 am

WASHINGTON : The International Monetary Fund (IMF) yesterday said forecasts for the global economy were "somewhat less dire" as wealthy countries and China rebounded more quickly than expected from coronavirus lockdowns.

But it warned that the outlook was worsening for many emerging markets.

The IMF forecast a 2020 global contraction of 4.4 per cent in its latest World Economic Outlook, an improvement over a 5.2 per cent contraction predicted in June, when business closures reached their peak.

It is still the worst economic crisis since the Great Depression in the 1930s, the Fund said.

The global economy will return to growth of 5.2 per cent next year, the IMF said, but the rebound will be slightly weaker than forecast in June, partly due to the extreme difficulties for many emerging markets and slowing reopening momentum as the virus continues to spread.

IMF chief economist Gita Gopinath said about US$12 trillion (S$16 trillion) in fiscal support and unprecedented monetary easing from governments and central banks helped to limit the damage, but employment remains well below pre-pandemic levels, with low-income workers, youth and women hardest hit. - REUTERS