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IMF: Corona’s Impact on the Economy Until the End of 2021

The corona virus outbreak (COVID-19) has made the global economy chaotic. Worse, the chief economist of the International Monetary Fund (IMF) Gita Gopinath said, the impact of the epidemic on the global economy might still be there by the end of 2021 so that at that time the economy could not fully recover.

The IMF has lowered its economic growth forecast this week. At present the IMF predicts that the global economy will shrink 3% this year. While next year the economy is expected to rebound and grow 5.8%. However, it is only a partial recovery.

"We project a recovery for 2021 in which growth is 5.8%, but it is a partial recovery," he told CNBC International, Friday (4/17/2020).

"So, even at the end of 2021, we projected the level of economic activity to be below what we projected before the virus spread," he added.
The economic impact brought by the virus from Wuhan, China is quite large on the world economy because the virus has forced various business activities and other activities in many countries to be closed or stopped.
For example, in China. The second largest economy in the world was forced to close (lockdown) several cities for several months to prevent the spread of plague. This impact not only affects the Chinese economy, but also the economies and businesses of other countries connected with it.
However, both the IMF and the governments and central banks of various countries have been aggressively issuing stimulus to reduce the economic impact brought by the plague. In fact, according to Gopinath, steps to help businesses and households in the midst of the pandemic issued by various institutions were quite "aggressive" and "fast".

"I think if you compare it with the global financial crisis … the response is much faster and the scale is much bigger," he said. According to Gopinath, at least cumulatively, economies around the world have announced fiscal stimulus worth around US $ 8 trillion.
However, according to him the stimulus was not distributed evenly throughout the entire economy. Where about US $ 7 trillion comes from G-20 countries, he explained.
"The concern we have is more about developing economies that have less fiscal space, who have to deal with external account issues, and I think they are in a more difficult place," he said.

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