The International Monetary Fund (IMF) on Tuesday predicted a 4.4% decline in growth in 2020 and 5.2% in 2021 as the global economy struggles to recover from the coronavirus pandemic-induced recession, reported Africa News.
The IMF’s 2020 forecast in its latest World Economic Outlook represents an upgrade of a 0.8% point from its previous forecast in June. By comparison, the global economy contracted by a mere 0.1% after the devastating financial crisis of 2008.
“We are projecting a somewhat less severe though still deep recession in 2020, relative to our June forecast,” chief economist Gita Gopinath said in a foreword to the October revision of the World Economic Outlook.
She added that the revision is driven by second-quarter GDP outturns in large advanced economies, which were not as negative as previously projected.
The international lending agency suggested that developing countries are doing somewhat better than developed nations as is the case with Sub-Saharan African states, whose growth is estimated to fall by 3% this year, with a return to growth of more than 3% currently forecast for 2021.
The IMF said that the global economy is coming back, but warned that the road to recovery from the COVID-19 pandemic will likely be long and uncertain with “uneven recoveries” in emerging and developing economies.
According to the IMF’s projection, countries as Botswana, Côte d’Ivoire, Ethiopia, Ghana, Guinea, Kenya, and Tanzania could show positive growth. Nigeria is projected to lose 4 points on its growth and South Africa could register a decline of 8%.
During a virtual presentation on Tuesday, Gopinath said that the poor are getting poorer with over 90 million people expected to fall into extreme poverty this year. Around 20 million people are projected to fall into extreme poverty in sub-Saharan Africa this year.
She said that the policies for the next stage of the crisis must-see lasting improvements and create a prosperous future for all.