The International Monetary Fund is warning that the global economic slowdown will be even worse than its first forecast.
Global growth is now expected to shrink by 4.9% this year, down from its April estimate of a 3% contraction, according to IMF’s world economic outlook. That was already due to be the deepest slump since the Great Depression of the 1930s.
“The Covid-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast,” the IMF said in its report.
Here are some individual country forecasts:
- The US economy is expected to shrink by 8%, while euro area output could decline by 10.2%, according to IMF.
- In Latin America, the current virus epicenter, Brazil's economy is expected to contract by 9.1%, while output in Mexico could decline by 10.5%.
- China, which got a head start on the recovery, is expected to see growth of 1%, in part due to policy support from the government.
IMF’s new outlook is better than recent forecasts from the World Bank and the Organization for Economic Cooperation and Development (OECD).
IMF did note however that there is a "higher-than-usual degree of uncertainty" around the forecast.