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Two months ago, the IMF reported a 3% reduction in global GDP, but now it expects a decrease of 4.9% as the quarantine measures are still in force. COVID-19 has caused widespread and profounder damage to the global economy than expected.
Moreover, the IMF believes that in 2021, there will be a new major outbreak of coronavirus, so the economic recovery may be weaker.
Quarantine and social distancing have hit both investment and consumption, however, many countries are coming out of quarantine and the situation is improving.
The IMF reported that developed economies were severely damaged. The US GDP is expected to shrink by 8.0% in 2020, and the eurozone economy may contract by 10.2%.
In Latin America, the coronavirus cases continue to grow. So, 2020 could bring losses for Brazil, Mexico, and Argentina. GDP of these countries could fall by 9.1%, 10.5%, and 9.9% respectively.
Perhaps only China is a country with growing GDP. Thanks to the work resumption and a small number of infected people China's GDP may rise by 1.0% in 2020.
Nevertheless, the IMF noted that governments and central banks would help to repair the damage caused by the pandemic thus boosting the recovery.
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