The International Monetary Fund has said the global economy will take a $12tn hit from the Covid-19 pandemic after slashing its already gloomy growth projections for the UK and other developed countries in 2020.
The IMF said it would take two years for world output to return to levels at the end of 2019 and warned that governments should be cautious about removing financial support to their fragile economies.
In an update to forecasts published in April, the Washington-based IMF said it now expected the global economy to contract by 4.9% this year, compared with a 3% drop expected in the spring.
The IMF said the coronavirus pandemic had been more negative for activity in the first half of 2020 than expected, and recovery was also projected to be slower. Global growth is forecast to be 5.4% in 2021, down from 5.8% in April, but would plummet to zero in the event of a second wave of the pandemic early next year, The Guardian reported.
"The Covid-19 pandemic pushed economies into a Great Lockdown, which helped contain the virus and save lives but also triggered the worst recession since the Great Depression," said the IMF’s economic counsellor, Gita Gopinath.
She noted that the fall in output in 2020 would be half as bad as the 10% drop in the early 1930s, and said there would be a fall in living standards for 95% of countries this year.
