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Coronavirus Pandemic

IMF warns of 'lingering scars' of Covid on global economy Filed on June 13, 2020
global economy, IMF, Covid


IMF's chief economist warned of the onset of bankruptcies and insolvency issues, and changes in consumer behaviour.

The global economy is recovering more slowly than expected from the coronavirus pandemic and will bear lingering scars from the experience, according to the International Monetary Fund.

"One has to be quite concerned about the path of recovery," said Gita Gopinath, IMF's chief economist.

Pointing out the depth of the crisis, stressed the need for labor reallocation, and warned of the onset of bankruptcies and insolvency issues, and changes in consumer behaviour. "Many of these variables point to significant scarring effects,"said Gopinath.

The IMF is set to release economic growth projections June 24 that "will be, very likely, worse than what we had" in April, even as there remains "profound uncertainty" around the forecasts, Gopinath said in a video  released on Friday as part of the seventh annual Asian Monetary Policy Forum.

In April the IMF estimated the global economy would shrink by three per cent this year -- the deepest contraction since the Great Depression -- and anticipated an even worse outcome if the coronavirus lingers or returns. That analysis saw growth rebounding to 5.8 per cent in 2021.



Issac John

Editorial Director of Khaleej Times, is a well-connected Indian journalist and an economic and financial commentator. He has been in the UAE's mainstream journalism for 35 years, including 23 years with Khaleej Times. A post-graduate in English and graduate in economics, he has won over two dozen awards. Acclaimed for his authentic and insightful analysis of global and regional businesses and economic trends, he is respected for his astute understanding of the local business scene.

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