IMF: COVID-19 pandemic leads to a deep global recession in 2020

The International Monetary Fund (IMF) forecasts a deep global recession in 2020 due to the COVID-19 pandemic, while the global economy is expected to contract by 4.4% overall. According to the Fund’s economists, the US economy may grow by 3-5 percentage points in 2021.

Speaking at the IMF’s World economic outlook forum in Boston, Gita Gopinath, chief economist at the International Monetary Fund, said the pandemic had halted business and industry development worldwide.

Although most countries have reopened their economies, which allowed the IMF to improve its current forecast compared to June 2020 slightly, Gopinath stressed that the repeated surge in infections and other factors contributing to political uncertainty shows that the global economy will recover slowly and unevenly until 2021.

Gopinath said that the government could accelerate the recovery of the global economy with several methods. She called for closer international cooperation to end the pandemic in creating and sharing medicines and vaccines as soon as they are widely available and mass-produced.

She also stressed that the national monetary and fiscal policy should not be restrained. The IMF believes that governments should focus on providing direct assistance to households and businesses.

In comments to the French news Agency, Gopinath said that if the United States accepts another stimulating economic package, similar to the $ 2.2 trillion packages adopted earlier this year, it will significantly help the recovery of the American and 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 second package’s adoption will add another 2 percentage points to this growth, which will return the US economy to the level it was at before the outbreak of the pandemic much faster.

According to the IMF, the US economy’s rapid recovery will benefit the entire world, especially the US neighbors – Mexico and Canada.