The International Monetary Fund will revise this year’s global economic forecast that has been significantly weakened by coronavirus lockdown measures after it strengthened more than expected since June, according to a senior IMF official.
“The picture today is less dire,” IMF Managing Director Kristalina Georgieva said Tuesday at the London School of Economics. She said the world economy is rebounding “from the depths of this crisis” but warned “this calamity is far from over.”
The IMF predicted in June that the gross domestic product, a measure of all goods and services produced during a fixed period, would contract by 4.9%, the sharpest shrinkage since the Great Depression in the 1930's.
Georgieva did not disclose revised forecast numbers, saying only that “developments in the second and third quarters were somewhat better than expected, allowing a small upward revision to our global forecast for 2020.”
The IMF will publish the forecast at next week’s annual meeting, which will be held virtually to protect participants from the coronavirus.
Georgieva said $12 trillion in financial aid and unprecedented levels of monetary easing have helped many advanced economies, including the U.S. and those in the Eurozone, avoid the worst damage and begin to recover.
She said China has also rebounded faster than expected but that other emerging market and low-income countries continue to grapple with weak health systems, excessive external debt and a dependency on sectors such as tourism that have been especially hard-hit by the coronavirus pandemic.
Georgieva called for more debt relief for low income countries beyond a freeze on debt repayment until the end of 2020. She said it would be necessary in some cases for the global community to coordinate a sovereign debt restructuring plan that involves public and private creditors.