Global economy recovering better than predicted: IMF

The International Monetary Fund (IMF) spokesperson said that the global economic outlook is better than what was expected in June.

Gerry Rice, the spokesperson of IMF pointed out that the current data coming suggests that the economic performance is somehow less frightful than the prediction of the World Economic Outlook published in June. But he added that there are still parts of the global economy that couldn’t pick up from the fall.

In the June outlook, IMF predicted that the world GDP would fall by 4.9 percent and the pandemic will sweep out $12 trillion in two years.

As the pandemic has caused major crises throughout the world, economists have been forced to constantly revise their forecasts for growth. The IMF is also set to update its global economic prediction on October 13, but Rice did not reveal details about the new outlook.

Recovery 

China and some other developed economies had a better experience than expected in the second quarter of 2020 and it was partly because of the relaxations given in lockdown and movement restriction measures after the complete shutdowns earlier in the year.

The global trade is also slowly beginning to recover but it can’t be said that the economy is completely out of danger, Rice said. He also mentioned that the outlook project will be highly challenging as the emerging market is in an unpredictable situation due to the coronavirus.

Experts also fear that the second wave of pandemic could destroy the current economic growth. Recently, Britain and France had to re-instituted some restrictions on a limited scale than earlier.

The households and businesses in the US are still confronting financial challenges and signaled that the IMF backing brings more fiscal support for the economy. Discussions on another round of stimulus are stand-still in Washington weeks before President Donald Trump appears for a second term in the November election.

Earlier this month, the IMF Managing Director Kristalina Georgieva and Chief economist Gita Gopinath in a column said that the governments should keep up with their support to the workers and businesses as the unexpected crisis could create new bankruptcies and job destruction.

The recovery is still very uneven across the globe and to maintain the healing process, it is highly important to continue the government support and ensure that it is not prematurely withdrawn, they added.