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The International Monetary Fund (IMF) has again revised down its global economic forecasts for 2020 and 2021, highlighting the uncertainties that still surround the recovery. The French economy is expected to be the third most affected economy in 2020.
Days go by and the economic consequences of the Covid-19 crisis seem to be getting worse. This is in any case what is anticipated by the International Monetary Fund (IMF) which revised downwards its economic forecasts for 2020 and 2021 on Wednesday 24 June. The IMF is now expecting a 4.9% drop in overall economic activity this year, compared to its April estimate of just 3.0%. And for 2021, it has lowered its forecast for global growth to 5.4% from 5.8% expected in the spring.
Thus, despite the expected recovery, world GDP in 2021 is expected to be about 6.5% below the level forecast last January, before the pandemic broke out.
“The Covid-19 pandemic had a greater than expected negative impact on activity in the first half of 2020, and the recovery is expected to be more gradual than expected,” the international organization explains in its new Global Economic Outlook.
A higher than normal degree of uncertainty
The IMF stresses that its forecasts remain subject to “a higher-than-normal degree of uncertainty” and considers that “the extent of the recent financial market upturn appears to be uncorrelated with the evolution of the economic outlook, as indicated in the update of the Global Financial Stability Report (GFSR)“.
“The development of a safe and effective vaccine could sustain sentiment and increase growth in 2021, even if vaccine production does not increase fast enough to provide herd immunity by the end of 2021,” the IMF adds. Countries need to channel “funds for vaccine production so that sufficient doses are made available quickly and affordably to all countries,” the international organization says.
Furthermore, the IMF calls on “the international community” to “act now by building up global stocks of essential goods and protective equipment, funding research (…) and putting in place mechanisms to effectively assist the poorest populations.”
France, the third most affected economy in 2020 according to the IMF
According to its economic outlook by country, the recession in French GDP (-12.8%) in 2020 would be the strongest after Spain (-12.8%) and Italy (-12.8%). For the euro zone as a whole, GDP is expected to fall by 10.2%, equivalent to the decline observed in Great Britain (-10.2%). Germany is expected to show a decline of 7.8%, slightly less than the United States (-8%). Despite the crisis, the Chinese economy is expected to grow by 1%.
Regarding the recovery in 2021, the French economy could grow by 7.3%, the strongest increase behind China (+8.2%).
Economic recovery through investment in renewable energies
“Building on the unprecedented decline in greenhouse gas emissions during the pandemic, they [countries] must implement their climate change mitigation commitments and work together to put in place equitable carbon tax systems or equivalent schemes on a larger scale,” the IMF said.
Finally, the international organization advises to “boost demand and reallocate available resources to sectors other than those whose weight in the economy is expected to decline sustainably in the aftermath of the pandemic “.
Reuters (David Lawder, French version Marc Angrand)
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The International Monetary Fund (IMF) has again revised down its global economic forecasts for 2020 and 2021, highlighting the uncertainties that still surround the recovery. The French economy is expected to be the third most affected economy in 2020.
Days go by and the economic consequences of the Covid-19 crisis seem to be getting worse. This is in any case what is anticipated by the International Monetary Fund (IMF) which revised downwards its economic forecasts for 2020 and 2021 on Wednesday 24 June. The IMF is now expecting a 4.9% drop in overall economic activity this year, compared to its April estimate of just 3.0%. And for 2021, it has lowered its forecast for global growth to 5.4% from 5.8% expected in the spring.
Thus, despite the expected recovery, world GDP in 2021 is expected to be about 6.5% below the level forecast last January, before the pandemic broke out.
“The Covid-19 pandemic had a greater than expected negative impact on activity in the first half of 2020, and the recovery is expected to be more gradual than expected,” the international organization explains in its new Global Economic Outlook.
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The International Monetary Fund (IMF) has again revised down its global economic forecasts for 2020 and 2021, highlighting the uncertainties that still surround the recovery. The French economy is expected to be the third most affected economy in 2020.
Days go by and the economic consequences of the Covid-19 crisis seem to be getting worse. This is in any case what is anticipated by the International Monetary Fund (IMF) which revised downwards its economic forecasts for 2020 and 2021 on Wednesday 24 June. The IMF is now expecting a 4.9% drop in overall economic activity this year, compared to its April estimate of just 3.0%. And for 2021, it has lowered its forecast for global growth to 5.4% from 5.8% expected in the spring.
Thus, despite the expected recovery, world GDP in 2021 is expected to be about 6.5% below the level forecast last January, before the pandemic broke out.
“The Covid-19 pandemic had a greater than expected negative impact on activity in the first half of 2020, and the recovery is expected to be more gradual than expected,” the international organization explains in its new Global Economic Outlook.
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