Why the IMF Is Predicting an Even Deeper Global Recession
IMF: COVID-19 Pandemic Leads To Deep Global Recession In 2020
Fund economists predict the American economy may grow by 3-5 percentage points in 2021
The International Monetary Fund (IMF) predicts a deep global recession in 2020 due to the COVID-19 pandemic, with the global economy expected to contract 4.4% overall.
Speaking Tuesday at the IMF’s Global Economic Outlook Forum in Boston, IMF chief economist Gita Gopinath said the pandemic has stalled business and industry worldwide..
While most nations have reopened their economies, allowing the IMF to slightly improve its current outlook compared to June 2020, Gopinath stressed that the re-surge in infections and other factors contributing to political uncertainty indicate that the global economy will recover slowly and unevenly up to 2021 year.
Gopinath clarified that governments can accelerate the global economic recovery through several methods. She called for closer international cooperation to end the pandemic in terms of creating and sharing medicines and vaccines as soon as they become widely available and mass production begins..
She also stressed that the national monetary and fiscal policy cannot be contained. IMF believes that governments should focus on providing direct assistance to households and businesses.
In a comment to the French news agency, Gopinath said that if the United States adopted another stimulus package, similar to the $ 2.2 trillion package passed earlier this year, it would greatly help the recovery of not only the American economy, but also the global economy..
According to the economist, if Congress does not approve another stimulus package, the US economy will grow by about 3.1% next year. The adoption of the second package will add another 2 percentage points to this growth, which will return the US economy much faster to the level it was at before the pandemic..
The fast recovery of the American economy will benefit the whole world, especially the US neighbors Mexico and Canada, according to the IMF.
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