Sunday, 18 October 2020 14:50

IMF calling on countries to create more flexible economies

IMF presented a new World Economic Outlook (WEO) last week. According to the outlook, the world economy will contract by 4.4% this year, which is 0.8 percentage points higher than the June forecast for this year. Growth is also expected to recover to 5.2% in 2021, which is 0.2 percentage points lower than the June forecast.

The IMF said that the global economy is still in a deep recession, and the increase in the previously forecast level of global economic growth is driven by better-than-expected economic indicators achieved in the second quarter. In addition, there are signs that the recovery will become even more intense in the third quarter. It happens thanks to extraordinary political measures to boost the economy. Currently, governments and central banks in various countries have already provided financial support worth about $ 12 trillion to families and businesses, but countries also need to be wary of accumulating medium-term financial risks.

The IMF forecasts that developed economies are likely to contract by 5.8% this year, including the US economy by 4.3%, the Eurozone economy by 8.3% and the UK economy by 9.8 %. Emerging and developing economies will contract by 3.3 %. China will be the only country among the main economic actors that will maintain positive economic growth, and this year this growth is expected to be 1.9 %, and next year - 8.2 %.

The IMF noted that “the rate of China's recovery has been faster than expected,” saying that after the quarantine was lifted in early April in most parts of the country, the normalization of economic activity has been faster than expected. Thanks to strong political support and export elasticity, China's GDP unexpectedly showed positive growth in the second quarter.

To date, the IMF has already provided funding to 81 countries, committing more than $ 280 billion in loans to help them overcome the crisis. The IMF calls on countries to create more flexible economies, which are necessary for an intensive and sustainable recovery.

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