IMF MD: Global economic growth expected to fall to -4.4% in 2020


The IMF released its latest World Economic Outlook this week, predicting global GDP will contract by 4.4% in 2020.

The IMF said forecasts for the global economy were "somewhat less dire" as wealthy countries and China rebounded more quickly than expected.

Even then, ending the worst economic crisis since the Great Depression of the 1930s depends on conquering the virus, she said in a news conference.

The Minister of Finance added that the International Monetary Fund had raised its estimate of the growth rate of the Egyptian economy in the current fiscal year to 2.8 percent instead of 2 percent in its report issued last May, which reflects the efforts made by the government to improve the growth structure to become more diversified.

"The virus is resurging with localized lockdowns being re-instituted".

"This crisis will leave scars", she told reporters, stemming from damage to labor markets that will take time to regain lost jobs, lost business investment and diminished schooling that will reduce the development of human capital around the world. The UK economy is predicted to grow by 5.9%, which is a -0.4 percentage point downgrade.

According to the minister, International Monetary Fund raised its estimates of the rate of growth of the Egyptian economy in the fiscal year 2019/2020 to 3.5 percent instead of 2 percent in its report issued last May, which comes in line with the government estimates.

The five nations with the highest Covid-19 death counts - US, Brazil, India, Mexico and United Kingdom - are forecast to suffer a total GDP decline of almost $1.8 trillion in nominal terms and $2.1 trillion after having been adjusted for differences in purchasing power.

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The IMF's economic expert, Gita Gopinath, said this week that "the cumulative loss in output relative to the pre-pandemic projected path is projected to grow from $11 trillion over 2020-21 to $28 trillion over 2020-25...this represents a severe setback to the improvement in average living standards across all country groups." .

The Fund disclosed this on Wednesday in its fiscal monitor policies for the recovery report stressing that there were countries often low-income developing countries, many in sub-Saharan Africa with no access to global financial markets.

The outlook for Japan has been revised upward by 0.5 points to minus 5.3 percent.

Amid the crisis, euro bond issuance by emerging markets soared to $140 billion in the first half of 2020, up from $95 billion in 2019, according to the report.

The revision reflects better-than-anticipated second quarter GDP outturns, mostly in advanced economies, where activity began to improve sooner than expected after lockdowns were scaled back in May and June, as well as indicators of a stronger recovery in the third quarter, it said.

This support, Gopinath explained, could be in terms of concessionary financing, aid and debt relief and restructuring.

The G20 on Wednesday approved a six-month extension to mid-2021 of the Debt Service Suspension Initiative (DSSI) that freezes official bilateral debt payments and said they would consider a further six-month extension in April. And it would end a period of more than two decades in which the rate of extreme poverty had declined.