Mubasher: The International Monetary Fund (IMF) expects the global economy to grow at 4.9% in 2020, down by 1.9% from its economic forecasts in April, according to IMF World Economic Outlook Update published on Wednesday, 24 June.
The global economic activities have been more affected by the coronavirus (COVID-19) outbreak during the first quarter (Q1) of 2020 than anticipated, with a more gradual recovery.
In 2021, the growth rate of the global gross domestic product (GDP) is expected at 5.4%, 0.4% lower than the IMF foresaw in April 2020.
The IMF has downgraded its global growth forecasts due to social distancing measures, which would continue during the second half (H2) of 2020, the restructuring of global supply chains that affect productivity, and longer lockdown in countries with high infection rates.
In the developed economies, the growth rate is expected at 8% in 2020, down 1.9% from the April forecast, while the economy of emerging markets and developing economies will grow at 3% in 2020, down 2%.
"The steep contraction in economic activity and fiscal revenues, along with the sizable fiscal support, has further stretched public finances, with global public debt projected to reach more than 100% of GDP this year," as shown in a report.