The International Monetary Fund in its latest forecast report has highlighted that the coronavirus pandemic coupled with lockdown measures are likely to continue wrecking havoc to economies barring China.
Global GDP growth forecast for fiscal year 2020-21 is expected to be a negative 4.9 percent. In its previous estimate the agency estimated global GDP growth at minus 3 percent.
"Overall, this would leave 2021 GDP some 6½ percentage points lower than in the pre-COVID-19 projections of January 2020," said an IMF June report.
China is the only economy expected to achieve growth. China's growth is forecast at 1 percent for 2020 and 8.2 percent for 2021 indicative of a full recovery.
In China's case, the country where the initial cases were reported, Wuhan was completely locked even as the capital and key cities remained shut down for a few weeks. Most cities including Wuhan re-opened for business by April. Wuha's re-opening coincided with instances representative of a second wave. The total lock down in China lasted for three months. China's GDP growth for 2019 was estimated at 6.1 percent - highest in the world.
US at a negative growth of minus eight percent leads economies that are forecast to be worst affected. IMF predicts the following statistics for these countries:
•United Kingdom: -10.2%
India, where total cases are inching closer to the 500,000 mark and casualties nearing the 15,000 mark, GDP is expected to slip by 4.5%. For latest stats, insights and news, click here.
IMF forecasts that the pain in the economy could last for a few more months. In 2021, India's economy is forecast to hit a GDP growth of 5-6 percent, higher than the 2019 GDP growth of 4.2 percent.
IMF's recent revision for India pales in comparison with its own April assessment - a blip of a mere 1.9 percent with signs of early recovery.
The two important parameters for a negative assessment are swifter recovery and the probability of a second wave. A second wave is expected to hit India sometime in September end with reports estimating several thousands to be affected of covid.
Other key insights from IMF's latest report:
1. $10 trillion has been spent over monetary measures.
2. Public debt expected to soar to 101 percent of GDP in 2020-21.
3. Several economies likely to witness a negative per capita income growth in 2020.
4. Low Income Households: Coronavirus undermines efforts made since 1990s in reducing extreme poverty
5. World trade that is projected to slip by 11.9 percent for 2020 is expected to grow by 8 percent.
6. Oil prices (in US dollars) slipped by a whopping 41.1 percent in 2020 are projected to see a jump of 3.8 percent.
Disclaimer: Image by Olga Lionart on Pixabay.