Covid-19 impact on the world economy according to the IMF
Yesterday (24.06) the IMF (International Monetary Fund) released an updated forecast on the world economy (World Economic Outlook of June).
The forecast for the future of the global economy, as had been imagined for some time now, is worse than initially assumed.
In January, the IMF had forecast world GDP growth of 3.3% for 2020.
After the Covid-19 pandemic, the forecast was revised in April and from 3.3% went to -3%. However, yesterday's new IMF projections are further downward and predict a 4.9% drop in global GDP by 2020. Indeed, the impact of Covid-19 was more damaging than expected in the first half of 2020 and it will therefore take longer to recover.
By 2021, a recovery of 5.4% worldwide is expected, compared to 5.8% assumed only a few months ago.
Up to $12.5 trillion will be lost between 2020 and 2021 due to the "Great Lockdown". A particularly serious impact will have on public finances and employment.
This is the updated list with the most significant drops in GDP in 2020:
Italy: -12.8% (from -9.1% of April)
Spain: -12.8% (from -8%)
France: -12.5% (from -7.2%)
Eurozone: -10.2% (from -7.5%)
United Kingdom: -10.2% (from -6.5%)
Canada: -8.4% (from -6.2%)
USA: -8% (from -5.9%)
Germany: -7.8% (from -7%)
Russia: -6.6% (from -5.5%)
Japan: -5.8% (from -5.2%)
India: -4.5% (from +1.9%)
China is the only country which could obtain an increase in GDP in 2020, with an estimated value of 1%.
This is the GDP’s estimate for 2021 by the IMF:
United Kingdom: +6.3%
Photo credit: Andy Li