IMF Downgrades World GDP to Contract by 4.9% as Covid-19 Proves to be More Severe

The International Monetary Fund on June 24, 2020, further downgraded global GDP to contract by 4.9% from its earlier forecast in April at 3%.

“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,” stated IMF on Wednesday in its World Economy Outlook update.
The Fund also reduced next year’s global economic growth from 5.8% to 5.4%.

“The steep decline in activity comes with a catastrophic hit to the global labor market,” said IMF, while pointing out that the global decline in work hours in the second quarter of 2020 is likely to be equivalent to a loss of more than 300 million full-time jobs.

In addition, IMF also slashed U.S. 2020 GDP from 5.9% contraction to 8% instead.