IMF drastically cuts global economic outlook amid COVID-19
The International Monetary Fund has dramatically cut its 2020 growth forecasts, including for Canada, as fallout from the COVID-19 outbreak batters the global economy.
In its World Economic Outlook published Tuesday, the IMF said it now expects Canada’s gross domestic product to contract 6.2 per cent this year. That marks an eight-percentage-point decline from its forecast of 1.8 per cent growth in January.
The IMF sees a partial rebound in 2021, with expectations Canada’s economy will grow 4.2 per cent next year.
Of all the advanced economies, the IMF sees the biggest contraction in Italy, a country that has seen a staggering number of deaths from the crisis, at 9.1 per cent. Japan has the most optimistic forecast at a 5.2-per-cent contraction.
As a whole, the IMF is expecting the global economy will shrink 3.0 per cent this year, compared to its previous estimate for 3.3 per cent growth.
“It is very likely that this year the global economy will experience its worst recession since the Great Depression surpassing that seen during the global financial crisis a decade ago,” the IMF wrote in its report.
“The Great Lockdown, as one might call it, is projected to shrink global growth dramatically. A partial recovery is projected for 2021, with above trend growth rates, but the level of GDP will remain below the pre-virus trend, with considerable uncertainty about the strength of the rebound.”