The outlook of the Global Economy of the future.
The IMF (International Monetary Fund (IMF), recently published its World Economic Outlook for 2020 and 2021. It would not be a real surprise to many when they read that it says:
“The global economy is projected to contract sharply by –3 percent in 2020, much worse than during the 2008–09 financial crisis.”
What then would be the state of global economy 2020?
It has been projected that this year, the economy of the United States of America, has been projected to drop by 5.9%, the euro by 7.5% and China is expected to grow by 1.2% percent.
Keeping the current Coronavirus pandemic in mind, the economists of the IMF have projected a fast, though conditional growth of the global economy and state:
“In a baseline scenario—which assumes that the pandemic fades in the second half of 2020 and containment efforts can be gradually unwound—the global economy is projected to grow by 5.8 percent in 2021 as economic activity normalizes, helped by policy support.”
Incidentally, it is expected that the economy of the United States of America, will grow at around same rate.
In the latest global economy news, Kristalina Georgieva, the managing director of the IMF, said:
“Today we are confronted with a crisis like no other. In fact, we anticipate the worst economic fallout since the Great Depression. Just three months ago, we expected positive per capita income growth in over 160 of our member countries in 2020. Today, that number has been turned on its head: we now project that over 170 countries will experience negative per capita income growth this year. The bleak outlook applies to advanced and developing economies alike. This crisis knows no boundaries.”
The secretary-general of the OECD (Organisation for Economic Co-operation and Development), Angel Gurria, warned on March 23, 2020, that advanced preparations should be made for suffering. Angel Gurria said that if countries had done all the right things, their suffering would last for years. If they had not done the right things, they would never recover.
Angel Gurria said:
“I do not agree with the idea of a ‘V’ shaped phenomenon. … Right now we know it’s not going to be a ‘V’. It’s going to be more in the best of cases like a ‘U’ with a long trench in the bottom before it gets to the recovery period. We can avoid it looking like an ‘L’, if we take the right decisions today.”
Last month, David Malpass, President of World Bank Group, proposed:
“[Our] first goal is to provide prompt support during the crisis, based on a country’s needs. It’s also vital to shorten the time to recovery and create confidence that the recovery can be strong. …. [O]fficial bilateral creditors [should] suspend debt payments due from IDA countries, effective immediately. This would allow time to assess the crisis’ impact and financing needs for each IDA country, and to determine what kind of debt relief or restructuring is needed.”
For any country that has a functioning government, the crisis because of the killer Coronavirus, would likely be an economic shock that is just temporary.
What would really be the state of the global economy in times to come? Who knows for sure?