The International Monetary Fund has sharply lowered its forecast for global growth this year because it envisions far more severe economic damage from the coronavirus than it did just two months ago.
The IMF predicts that the global economy will shrink 4.9% this year, significantly worse than the 3% drop it had estimated in its previous report in April. It would be the worst annual contraction since immediately after World War II.
The global organization predicts that the global economy will shrink 4.9% this year, significantly worse than the 3% drop it had estimated in its previous report in April. The IMF has forecast that the global economic damage from the recession will be worse than from any other downturn since the Great Depression of the 1930s.
For the United States, the it predicts that the nation’s gross domestic product — the value of all goods and services produced in the United States — will plummet 8% this year, even more than its April estimate of a 5.9% drop. That would be the worst such annual decline since the U.S. economy demobilized in the aftermath of World War II.
The IMF issued its bleaker forecasts Wednesday in an update to the World Economic Outlook it released in April. The update is generally in line with other recent major forecasts. Earlier this month, for example, the World Bank projected that the global economy would shrink 5.2% this year.
