China leads way as IMF says global economic recession ‘less severe’ than previously thought
- Prospects for China are much stronger than for most other emerging markets and developing economies, with its economy projected to grow by about 10 per cent over 2020 to 2021
- Global economy’s road to recovery remains prone to ‘long, uneven and uncertain’ setbacks, International Monetary Fund cautions
The world economy will experience a “less severe though still deep” recession this year than previously expected, as prospects have worsened significantly in some developing economies while large advanced economies have reported stronger-than-expected growth out-turns, the International Monetary Fund (IMF) said on Tuesday.
The IMF’s World Economic Outlook estimated that the global economy will contract by 4.4 per cent this year – a less severe contraction than the 4.9 per cent downturn it forecast in June. And growth in 2021 is projected to rebound to 5.2 per cent, or 0.2 percentage points lower than the June estimate.
Even though recent data suggests that many economies have started to recover at a faster pace than anticipated after reopening from the so-called Great Lockdown, the recovery is not assured while the pandemic continues to spread, the IMF warned.
Prospects for China are much stronger than for most other emerging market and developing economies, and it is projected to be the only G20 economy to record positive growth this year.
While recovery in China has been faster than expected, the global economy’s long ascent back to pre-pandemic levels of activity remains prone to setbacks
China’s economy looks to grow 1.9 per cent this year, an upgrade of 0.9 percentage points from the IMF’s forecast in June, given signs that the recovery accelerated in the third quarter. The world’s second-largest economy is still expected to grow 8.2 per cent next year, unchanged from the IMF’s projection in June.