IMF chief warns full global economic recovery unlikely in 2021

In April, the IMF forecast that business closures and lockdowns to slow the spread of the virus would throw the world into a deep recession.

In April, the IMF forecast that business closures and lockdowns to slow the spread of the virus would throw the world into a deep recession.

AFP/Angela Weiss

WASHINGTON - The global economy will take much longer to recover fully from the shock caused by the new coronavirus than initially expected, the head of the International Monetary Fund said, and she stressed the danger of protectionism.

Managing Director Kristalina Georgieva said the Fund was likely to revise downward its forecast for a 3 percent contraction in GDP in 2020, with only a partial recovery expected next year instead of the 5.8 percent rebound initially expected.

In an interview with Reuters, she said data from around the world was worse than expected.

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"Obviously that means it will take us much longer to have a full recovery from this crisis," she said in an interview. She gave no specific target date for the rebound.

In April, the global lender forecast that business closures and lockdowns to slow the spread of the virus would throw the world into the deepest recession since the 1930s Great Depression.

But data reported since then points to "more bad news," Georgieva said earlier this month.

READ: Coronavirus plunges world economy into brutal recession

The IMF is due to release new global projections in June.

"We should not turn away from what has worked for people everywhere: a division of labour and collaboration and trade, which allows the costs of goods and services to go down, allows incomes to go up, and allows poverty within countries and across countries to retreat," she told Reuters.

Source
Reuters