Daily Management Review

Global Economy Not To Recover As Soon As Was Previously Expected: IMF


According to the head of the Managing Director of the International Monetary Fund,m Kristalina Georgieva, a much longer time period than previously expected for a complete recovery of the global economy from the recession induced by the outbreak of the novel coronavirus pandemic will be required.
She also stressed on the dangers posed by protectionism to the global economy.
Its forecast for a 3 per cent contraction in global GDP for 2020 it likely to be revised downward by the Fund, Georgieva said, but provided no further details. That will also likely alter the previous forecast by the Find for a partial recovery of 5.8 per cent in 2021.
The economic data received by the Fund from all across the worse than was expected, Georgieva said in an interview with Reuters.
“Obviously that means it will take us much longer to have a full recovery from this crisis,” Georgieva said without mentioning anything about specific date for a recovery. 
According to a forecast by the Fund in Aril, the global economy was expected to be pushed into a recession that would be worst since the Great Depression of the 1930s because of the closure of non essential business and the lockdowns all across the world oimplemented o try and slow down the spread of the pandemic.
But earlier this month, Georgieva said that the data received by the Fund since April pointed towards “more bad news.”
The IMF is due to release new global projections in June.
 According to the Treasury Department of the United States, one of the major concerns and focus for the finance ministers from the Group of Seven advanced economies will be the global economic outlook when the ministers meet remotely on Tuesday.
During the recovery period, issues such as high debt levels, increased deficits, unemployment, bankruptcies, increased poverty and inequality were causes of concern for the IMF, Georgieva said. But the digital economy was also being boosted at the same time because of the pandemic, which in turn increased the potential for increase of transparency and e-learning while also allowing small companies and businesses to gain access to markets.
 The IMF is advising its member countries to keep communication and trade flows open because those were behind the global growth for decades, Georgieva said when she was asked to comment on the resuming of trade tensions between the two largest companies of the world – the US and China
 “We do need to keep trade flows open, especially for medical supplies, food, and longer-term to find a pathway to overcome what is happening now with this crisis,” Georgieva said. “We want to continue to build this more prosperous future for all by overcoming the scarring that may come from this crisis.”
 In recent weeks, there has been an increase in the tensions between the US and China as officials of both the countries have suggested that the [partial trade agreement that was struck between the two countries that brought a temporary end to an acrimonious trade war between them for 18 months and one that upended world trade could be abandoned. The deal was signed just a few months ago.
 Warning against protectionism policies on trade, by countries, Georgieva warned: “We should not turn away from what has worked for people everywhere: a division of labor 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.”