The International Monetary Fund said Wednesday that the global economy faced an even deeper downturn than it previously projected as the coronavirus pandemic continued to sow uncertainty and businesses around the world struggled to shake off the virus.
In an update to its World Economic Outlook, the I.M.F. said it expected the global economy to shrink 4.9 percent this year, a sharper contraction than the 3 percent it predicted in April.
The fund noted that, even as businesses began to reopen, voluntary social distancing and enhanced workplace safety standards were weighing on economic activity. Moreover, the “scarring” of the labor force from mass job cuts and business closures means that the world economy will recover much more slowly, with the I.M.F. projecting 5.4 percent global growth in 2021, far below its pre-pandemic projections.
The I.M.F. now projects that the U.S. economy will shrink 8 percent this year before expanding 4.5 percent next year. Economies in the eurozone are projected to shrink 10.2 percent this year and expand 6 percent next year. The economy of China, where the virus originated and which imposed draconian containment measures, is expected to expand 1 percent this year and 8.2 percent in 2021.
The New York Times
