Global economic forecast not as dark as earlier guess: IMF

September 26, 2020 - United States Of America

Though the global economic outlook is not quite as dark as expected three months ago, it remains challenging due to the novel coronavirus pandemic and its impact on many economic sectors, according to International Monetary Fund (IMF) spokesman Gerry Rice, who recently said the situation remained ‘precarious’ in many developing nations and emerging markets other than China.

Citing better-than-anticipated economic data from China and other advanced economies without offering specific numbers, he said IMF is also concerned about rising debt levels.

IMF is due to release its latest World Economic Outlook (WEO) on October 13. In June, it slashed its 2020 global output forecasts further, forecasting the global economy would shrink by 4.9 per cent, compared with a 3 per cent contraction predicted in April.

"Recent incoming data suggests that the outlook may be somewhat less dire than at the time of the WEO update on June 24, with parts of the global economy beginning to turn the corner, he was quoted as saying by a global newswire.

There are also signs that global trade is slowly beginning to recover after widespread lockdowns aimed at containing the spread of the virus, Rice said.

Many countries faced continued weakness in domestic demand, lower export demand, shrinking remittances and declines in tourism, he said.

"Taken together, we are very concerned that this crisis will reverse the gains in poverty reduction that have been made in recent years, and roll back progress that has been made toward the Sustainable Development Goals," he added, referring to ambitious goals set out by the United Nations five years ago to end poverty and inequality.