IMF predicts it will take 2 years for world economy to return to end-of-2019 levels

(Image credit: Gita Gopinath.)

published 24 June 2020

The International Monetary Fund's already-gloomy forecast just got gloomier.

In an update on the World Economic Outlook, the IMF predicted — largely due to the coronavirus pandemic — the world's economy would contract not by three percent, as previously estimated in April, but by 4.9 percent, leading to a $12 trillion hit. Gita Gopinath, the IMF's chief economist, said there would be a fall of living standards in 95 percent of the world's countries this year, and forecasts for every Group of Seven nation, as well as the leading developing nations, worsened.

The IMF does see growth going forward, although it now expects it'll be slightly slower than initially thought in April. Ultimately, the IMF believes it will take two years until world economic output returns to the levels seen at the end of 2019 before the pandemic truly took hold. With that in mind, the organization has urged governments to be cautious about removing financial support for their economies. Read more at The Guardian.

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Tim is a staff writer at The Week and has contributed to Bedford and Bowery and The New York Transatlantic. He is a graduate of Occidental College and NYU's journalism school. Tim enjoys writing about baseball, Europe, and extinct megafauna. He lives in New York City.