The International Monetary Fund has upgraded its global real gross domestic product (GDP) forecast for 2020 to -4.4 percent in October from -5.2 percent in June.
“The world is coming back from the depths of its collapse in the peak of this crisis, which was the first half of this year. Employment levels have partially rebounded after having plummeted to historic lows. That said, this crisis is far from over,” Gita Gopinath, chief economist and director of the research department at the IMF, said in a virtual press conference.
Gopinath noted that employment remains well below levels prior to the pandemic, and the labor market is increasingly polarized, with low-skill workers, youth and women being more impacted.
The poor are becoming poorer, with as many as 90 million individuals forecasted to fall into extreme poverty just this year.
“The ascent out of this calamitous, great lockdown is likely to be long, uneven and highly uncertain,” Gopinath said during the press conference. “It is therefore essential that fiscal and monetary policy support are not prematurely withdrawn as best possible.”
Gopinath also noted that nations that heavily depend on contact-intensive services and oil exports face weaker recoveries in contrast to economies led by manufacturing.
“The IMF in June projected a severe global GDP contraction in 2020,” she said, as per the remarks.” The picture today is less dire. We now estimate that developments in the second and third quarters were somewhat better than expected, allowing for a small upward revision to our global forecast for 2020. And we continue to project a partial and uneven recovery in 2021.”
Georgieva echoed Gopinath in her prepared remarks, saying: “The global economy is coming back from the depths of the crisis. But this calamity is far from over.”