IMF warns of long, slow recovery as it eases global recession forecast

The International Monetary Fund (IMF) now sees the world’s GDP contracting at a 4.4 percent pace — an improvement from the 4.9 percent expected in its June outlook. it said yesterday in its October World Economic Outlook (pdf).

These projections resulted after economies coming out of lockdown showed improved trade, retail activity, and growth figures,

Launching the report titled “A long and difficult ascent,” the fund’s chief economist Gita Golpinath warned that the economic recovery will be “long, uneven and uncertain” as the pandemic continues to spread and countries begin to reintroduce lockdown measures.

Many countries will see “lasting damage” to output, inflicting a “major setback” to living standards, she said, adding that the process of transferring workers from sectors at risk of long-term decline such as travel to growing industries like digital technology will require significant policy support.

The IMF has downgraded its outlook for 2021, saying it sees the global economy growing 5.2 percent and not the 5.4% it had previously forecast due to expectations that some restrictions on movement and social distancing may remain in place well into next year.

The global economy experienced a “strong rebound in the third quarter, but slowing momentum entering the fourth quarter” as new infections rose across many developed economies, the report says.