It has been confirmed that the International Monetary Fund (IMF) has sharply lowered its forecast for global growth 2020 because it envisions a far more severe economic damage from the current coronavirus pandemic.
This is expected to be more than the damage done to economies within the last two months and so the IMF predicts that the global economy will shrink by 4.9% this year, significantly worse than the 3% drop it had estimated in its previous report in April and therefore, would be the worst annual contraction since immediately after World War II.
The IMF also predicts that the United States gross domestic product ‘the value of all goods and services produced in the United States ‘will plummet 8% this year, even more than the 5.9% drop that was estimated in April.
According to the IMF, COVID-19 is hurting low-income households, “imperiling the significant progress made in reducing extreme poverty in the world since 1990.”
In recent years, the proportion of the world’s population living in extreme poverty ‘equivalent to less than $1.90 a day’ had fallen below 10% from more than 35% in 1990.
Understanding this, the IMF predicted that more than 90% of developing and emerging market economies will suffer declines in per-capita income growth for 2020.
However, for 2021, the IMF sees a rebound in economic growth, as long as there is no major wave of the virus.
A 5.4 percent increase in the global economy is expected.