The International Monetary Fund on Tuesday said forecasts for the global economy were “somewhat less dire” as wealthy countries and China rebounded more quickly than expected but warned the outlook was worsening for many emerging markets.
The IMF now sees the world economy shrinking by 4.4% this year. That’s less severe than the 5.2% it had estimated in June.
The IMF says it’s still the worst economic crisis since the Great Depression of the 1930s. But it says unprecedented fiscal and monetary measures taken by governments and central banks helped limit the damage.
It says its outlook has become less dim because advanced economies and China bounced back more quickly than expected from coronavirus lockdowns. It predicts the U.S. economy will contract by 4.3% this year — nearly half the rate it had forecast in June. And it says China will be the only economy that will post positive growth - some 1.9%. China had reopened most of its economy by April and is strongly rebounding from the pandemic.
But the IMF warned the outlook was worsening for emerging markets other than China. It now expects those economies to shrink 5.7% as the virus keeps spreading in large countries like India and Indonesia.