The recession is much worse than the IMF expected and the hit to jobs 'catastrophic'

The International Monetary Fund thinks global GDP will contract by 4.9% this year, downgrading its estimate from April, when output was forecast to shrink by 3%. CNN's Clare Sebastian reports.

Posted: Jun 25, 2020 6:01 AM
Updated: Jun 25, 2020 6:01 AM

The International Monetary Fund has slashed its global economic forecasts for 2020, saying the coronavirus pandemic is causing a much steeper recession and a slower recovery than initially expected.

The organization said Wednesday that it thinks global GDP will contract by 4.9% this year, downgrading its estimate from April, when output was forecast to shrink by 3%.

That was already due to be the deepest slump since the Great Depression of the 1930s.

The pandemic is causing an "unprecedented decline in global activity," according to the IMF. It said the global labor market has taken a "catastrophic" hit, movement outside the home remains depressed, companies have cut back on investment and consumer spending has dropped significantly.

"The Covid-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast," the IMF said in its report.

The outlook is slightly rosier than those provided by the World Bank and the Organization for Economic Cooperation and Development, which have recently forecast that global GDP would shrink by 5.2% and 6%, respectively, before rebounding in 2021.

But the IMF warned of a "higher-than-usual degree of uncertainty" around its forecast, which it said was based on a number of assumptions, including stable financial conditions.

And it pointed to the difficulty of charting the trajectory of the virus and measures to contain it, as well as the impact of voluntary social distancing on spending, the consequences of new workplace safety measures and lingering unemployment.

Though every region is expected to face a recession in 2020, there will be "substantial differences across individual economies," the IMF said.

China, which got a head start on the recovery, is expected to log growth of 1%, in part due to policy support from the government. India's economy, meanwhile, is forecast to shrink 4.5% following a longer lockdown and slower-than-expected recovery.

The US economy is expected to shrink by 8%, while output across the 19 countries that use the euro could decline by 10.2%.

Countries in Latin America that are still struggling to contain the virus will also be hard hit. Brazil's economy is expected to contract by 9.1%, while output in Mexico could decline by 10.5%.

The IMF expects the global economy to grow by 5.4% in 2021, still 6.5 percentage points below pre-coronavirus projections. However, much depends on ongoing stimulus support, the group said. So far, governments have announced nearly $11 trillion in fiscal measures, per the IMF.

West Lafayette
Clear
80° wxIcon
Hi: 92° Lo: 67°
Feels Like: 82°
Kokomo
Clear
77° wxIcon
Hi: 89° Lo: 66°
Feels Like: 79°
Rensselaer
Clear
79° wxIcon
Hi: 88° Lo: 64°
Feels Like: 81°
Fowler
Clear
79° wxIcon
Hi: 89° Lo: 66°
Feels Like: 81°
Williamsport
Clear
81° wxIcon
Hi: 90° Lo: 66°
Feels Like: 84°
Crawfordsville
Clear
80° wxIcon
Hi: 90° Lo: 66°
Feels Like: 83°
Frankfort
Scattered Clouds
82° wxIcon
Hi: 90° Lo: 67°
Feels Like: 84°
Delphi
Clear
81° wxIcon
Hi: 91° Lo: 66°
Feels Like: 82°
Monticello
Clear
81° wxIcon
Hi: 90° Lo: 65°
Feels Like: 82°
Logansport
Clear
81° wxIcon
Hi: 90° Lo: 64°
Feels Like: 82°
WLFI Radar
WLFI Temps
WLFI Planner

Indiana Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 45952

Reported Deaths: 2650
CountyConfirmedDeaths
Marion11387679
Lake4872240
Elkhart308543
Allen2677114
St. Joseph184965
Cass16369
Hamilton1484100
Hendricks136699
Johnson1235118
Porter68537
Madison64363
Tippecanoe6408
Clark62244
Bartholomew57844
Howard54356
LaPorte53925
Kosciusko4952
LaGrange4596
Jackson4553
Noble44728
Vanderburgh4306
Hancock42935
Delaware42648
Boone42242
Shelby41625
Marshall4123
Floyd36344
Morgan32031
Montgomery28720
Grant28526
Clinton2792
Dubois2606
White25810
Monroe25628
Decatur24632
Henry23515
Lawrence23124
Vigo2248
Harrison20822
Dearborn20422
Warrick20129
Greene18431
Miami1802
Jennings16911
Putnam1658
DeKalb1594
Scott1547
Daviess13916
Orange13323
Wayne1286
Franklin1248
Steuben1232
Perry1209
Ripley1127
Carroll1092
Jasper1092
Wabash1072
Fayette967
Newton9510
Whitley814
Randolph764
Starke733
Huntington702
Wells681
Jay670
Fulton661
Jefferson651
Washington641
Pulaski631
Knox620
Clay594
Rush573
Benton480
Adams451
Owen451
Gibson442
Sullivan441
Brown381
Blackford372
Posey350
Spencer311
Tipton301
Crawford290
Fountain292
Switzerland250
Martin220
Parke220
Ohio140
Warren141
Union130
Vermillion130
Pike80
Unassigned0194

COVID-19 Important links and resources

As the spread of COVID-19, or as it's more commonly known as the coronavirus continues, this page will serve as your one-stop for the resources you need to stay informed and to keep you and your family safe. CLICK HERE

Closings related to the prevention of the COVID-19 can be found on our Closings page.

Community Events