Fund will make a ‘small’ upward revision to its earlier forecast, says Georgieva
The global economy is looking ‘less dire’ than it did in June and the International Monetary Fund will make a ‘small’ upward revision to its 2020 global output forecast, IMF Managing Director Kristalina Georgieva said on Tuesday.
“My key message is this: The global economy is coming back from the depths of this crisis,” Ms. Georgieva said in remarks to a London School of Economics event. “But this calamity is far from over. All countries are now facing what I would call ‘the long ascent’ — a difficult climb that will be long, uneven, and uncertain. And prone to setbacks,” she added. The IMF had in June forecast that the coronavirus shutdowns would shrink global GDP by 4.9%, marking the sharpest contraction since the 1930s Great Depression, and called for more policy support. The IMF will publish its revised forecasts next week.
But $12 trillion in fiscal support, coupled with unprecedented monetary easing has allowed many advanced economies, including the United States and the euro zone, to escape the worst damage and start to recover, she said.
‘China recovery faster’
China also has recovered faster than expected.
Emerging markets and low income countries face a precarious situation with weak health systems, high external debt and dependency on sectors most exposed to the pandemic such as tourism and commodities as well as high external debt, she said. “In low-income countries, the shocks are so profound that we face the risk of a lost generation.”