Advertisement

Global Economy Could Suffer ‘Significant Scarring’ – IMF Official

Channels Television  
Updated June 12, 2020
In this file photo an exterior view of the building of the International Monetary Fund (IMF), with the IMG logo, is seen on March 27, 2020 in Washington, DC. Olivier DOULIERY / AFP
In this file photo an exterior view of the building of the International Monetary Fund (IMF), with the IMG logo, is seen on March 27, 2020 in Washington, DC. Olivier DOULIERY / AFP

 

The economic fallout from the coronavirus pandemic could inflict “significant scarring” worldwide and the outlook for recovery remains highly uncertain, IMF chief economist Gita Gopinath said Friday.

The fund in April projected a global economic contraction of 3.0 percent, but Gopinath said the updated forecasts due out June 24 “will be very likely worse.”

READ ALSO: UK Economy Shrinks By A Fifth

“There is profound uncertainty of recovery,” she said in a virtual address to the 7th Asian Monetary Policy Forum.

Noting the damage done in particular sectors like transportation, as well as the growing risk of bankruptcies and persistent job losses, coupled with expected changes in consumer behavior “one has to be concerned about the path of recovery.”

“Many of these variables point to significant scarring effects,” she said, which would leave lasting damage on the global economy.

In its World Economic Outlook in April, the Washington-based crisis lender warned that the downturn could be worse if the pandemic was prolonged or saw a resurgence.

The World Bank last week said it expects the global economy to contract by 5.2 percent, in the most widespread crisis in 150 years.

AFP



More on Business

MORE FROM CHANNELS TV