By Tom Burnett CFA
On April 14, 2020, the IMF (“International Monetary Fund”) issued its regular update of its World Economic Outlook Growth Projections. The latest forecast reflects the negative impact of the Covid-19 virus outbreak. The revisions from its October 2019 forecasts are decidedly negative.
The latest forecast calls for World Output (GDP) to decline by 3.0% in 2020, down from growth of 2.9% in 2019. In the U.S., GDP is now projected to decline by 5.9% from growth of 2.3% in 2019. The EU is now expected to experience a decline in GDP of 7.5%, down from 1.2% in 2019. China is forecast to grow its GDP by 1.2% this year, well down from 6.1% in 2019.
The good news in the IMF forecast revisions is the expected rebound in 2021. For example, world growth is now thought to bounce back by 5.8% next year, led by China with a 9.2% increase. In the U.S., 2021 growth is now thought to bounce back at a positive annual rate of 4.7%.
Tom Burnett CFA is Director of Research