The International Monetary Fund (IMF) has projected the global growth to be negative 4.4pc. The revised estimates are only marginally better than June predictions of a negative 4.9pc growth. In the ‘World Economic Outlook’ released on Oct 13, IMF stated the upgrade comes in the wake of lesser dire outcomes in the second quarter, along with estimations of a better recovery in the third quarter. The performance, however, could be offset by a weaker performance by a few developing countries.
Growth in 2021 could be at 5.2pc, lower than June estimates of 5.4pc. After the initial rebound, it will slow down to 3.5pc in the medium-term in both — developed and developing nations.
China’s output in 2020 is projected to exceed 2019 levels. For other countries, including advanced economies, the industrial output could remain below 2019 levels well into 2021. Manufacturing-led economies are expected to fare better than those dependent on crude oil exports, states IMF.
The US is expected to have a growth of -4.3pc in the year. The international body predicts the economy is unlikely to return to 2019 levels till late 2021 or even 2022. The country put in a large amount of stimulus, fiscal and central bank support, which has helped the country recover better.
The IMF estimates India’s growth for the fiscal year 2021 to be a negative 10.3pc. In FY2022, the country could bounce back with a growth of 8.8pc. Reserve Bank of India stepped in to aid recovery through interest rate cuts amid the spike in inflation. The IMF, however, believes the central bank needs to do more once the inflation spike comes under control. Together with stimulus from the monetary and the fiscal side, India could be on a path to recovery.
The report forecasts growth in Sub-Saharan Africa to be a negative 3pc for 2020 and a negative 3.1pc for 2021. Nigeria, which depends on commodity exports, could be hit not just by the pandemic, but also a drop in oil prices. In South Africa, a second wave of infections triggered a second lockdown leading to activity collapse. In the region, however, the world bank projects that over 20mn people may enter extreme poverty. These countries are already reeling under heavy debt distress.