COVID-19 to shrink global economy

The global economy is expected to shrink by 3.0 per cent during 2020 due to Coronavirus-driven collapse of activity. This will mark the steepest downturn since the Great Depression of 1930s as per International Monetary Fund (IMF), which in its 2020 World Economic Outlook, estimates a rebound in 2021, with the world economy growing at 5.8 per cent.

However, IMF added that its forecasts were marked by extreme uncertainty but the outcomes could be far worse, depending on the course of pandemic. IMF’s forecast assume that the outbreak of Coronavirus will peak in most of the countries around the globe during the second quarter and eventually, fade in the second half of the year after which, there would be gradual increase in business activities.

China will maintain a positive growth of 1.2 per cent in 2020, a reduction from six per cent growth in IMF’s January forecast. IMF added that China’s economy is expected to grow 9.2 per cent in 2021.

Despite the current halt on economic activities due to the nationwide lockdown, India’s 2020 fiscal-year growth is expected to stay in a positive territory.