KUALA LUMPUR, Oct 14 — Global growth is projected at −4.4 per cent in 2020, an upward revision of 0.8 per cent compared with projection in June as activity began to improve, especially in advanced economies, the International Monetary Fund (IMF) said.
“The revision reflects better than anticipated second quarter GDP (gross domestic product) 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.”
Global growth is projected at 5.2 per cent in 2021, a little lower than in the June 2020 World Economic Outlook (WEO) Update, reflecting the more moderate downturn projected for 2020 and consistent with expectations of persistent social distancing, the IMF said in its latest update.
Following the contraction in 2020 and recovery in 2021, the level of global GDP in 2021 is expected to be a modest 0.6 per cent above that of 2019, it said in the update titled “Long and Difficult Ascent.”
The growth projections imply wide negative output gaps and elevated unemployment rates this year and in 2021 across both advanced and emerging market economies.
After the rebound in 2021, global growth is expected to gradually slow to about 3.5 per cent into the medium term, it said.
“This implies only limited progress towards catching up to the path of economic activity for 2020–25 projected before the pandemic for both advanced and emerging markets and developing economies.”
The IMF said social distancing will continue into 2021 but will subsequently fade over time as vaccine coverage expands and therapies improve. Local transmission is assumed to be brought to low levels everywhere by the end of 2022.
Beyond the pandemic, multilateral cooperation is needed to defuse trade and technology tensions between countries and address gaps — for instance in services trade — in the rules-based multilateral trading system.
Countries must also act collectively to implement their climate change mitigation commitments, it said.
The global community should also take urgent steps to strengthen its defenses against calamitous health crises, for example by augmenting stockpiles of protective equipment and essential medical supplies, financing research, and ensuring adequate ongoing assistance to countries with limited health-care capacity, including through support of international organisations, it added.
— Bernama
