The International monetary fund has announced that the world economy is projected to fall by 4.4% in 2020, an upward guide from an earlier predicted rate of -4.9%.
On Tuesday, IMF revised the global economy growth upward for the year 2020 but warned against long and unstable roadblocks to full economy recovery.
According to the IMF’S Chief Economist, Gita Gopinath, the projection expects that due to the COVID-19 pandemic, social distancing will continue into 2021, however, the transmission of the virus will decline globally by the end of 2022.
“We are projecting a somewhat less severe though still deep recession in 2020, relative to our June forecast.”
Gita added that the revision was driven as a result of better than expected growth in advanced economies and china during the second quarter of the year and signs of a more rapid recovery in the third quarter of the year .
How It All Began
About a week ago, Unmask NG released a report that shows that the world economy has ended up performing better than IMF had envisaged in Q2 and Q3.
- Thus leading to an upward revision, its growth forecasts which are scheduled to be released a week later.
- Moving on, the report stated “We have reaches the point, largely because of extraordinary policy measures that put a floor under the world economy.”
- Governments have provided around $12 trillion in fiscal support to households and firms.
- Unprecedented monetary policy actions have maintained the flow of credit, helping millions of firms to stay in business.
Emerging market and developing economies are having to manage this crisis with fewer resources, as many are constrained by elevated debt and higher borrowing costs
- These economies will need to prioritize critical spending for health and transfers to the poor and ensure maximum efficiency.
- They will also need continued support in the form of international grants and concessional financing, and debt relief in some cases. Where debt is unsustainable, it should be restructured sooner than later to free up finances to deal with this crisis.