Economic recovery from COVID crisis is 'tremendously uncertain', says IMF Chief Economist

International Monetary Fund research director Gita Gopinath, on June 29 said that the organisation was uncertain about how the economic recovery would look like, but the global rebound is weaker than desired. Speaking at a virtual address hosted by Centre for Strategic and International Studies, the chief economist said that there was still “tremendous” uncertainty about what path of “recovery looks like”. In recent weeks, many countries in Europe and Asia have reopened in a bid to save their plunging economies.

Slower recovery for oil-exporting nations

Predicting a tough path for the oil-exporting nations, Gopinath said, "We've recovered from the March and April lows, but still the path for oil that we are projecting is lower than projected before this crisis. And so, these countries are going to have a much weaker recovery relative to other countries." She also asserted that the IMF’S G20 debt relief initiative for poor countries will most likely be extended beyond the end of 2020.

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Read: IMF Projects Steep 4.5% Contraction Of Indian Economy As Coronavirus, Lockdown Bites

Last week , IMF projected that the Indian economy in 2020 will contract by a steep 4.5%, due to the coronavirus pandemic and the subsequent lockdown. The silver lining, however, is that it projects a growth rate to bounce back strongly by 6.0% in 2021.“India’s economy is projected to contract by 4.5 per cent following a long period of lockdown and slower recovery than anticipated in April,” the IMF said, in an update to the World Economic Outlook it released in April.

The IMF also predicted that the global economy will shrink 4.9% this year, significantly worse than the 3% drop it had estimated in its previous report in April. It would be the worst annual contraction since immediately after World War II.

For the United States, the IMF predicts that the nation's gross domestic product — the value of all goods and services produced in the United States — will plummet 8% this year, even more than its April estimate of a 5.9% drop. This, too, would be the worst such annual decline since the U.S. economy demobilized in the aftermath of World War II. The IMF noted that the pandemic was disproportionately hurting low-income households, “imperiling the significant progress made in reducing extreme poverty in the world since 1990.”

Read: IMF Predicts 'deeper Recession' And 'slower Recovery' From Coronavirus Pandemic

Read: IMF Forecasts Deeper Latin America Recession In 2020