Don Jacobson
UPITue, 14 Apr 2020 19:34 UTC
© Kdevin Dietsch/UPI
The International Monetary Fund in a revised outlook for 2020 said Tuesday it expects the global economy to shrink by 3 percent due to the impact of the coronavirus outbreak.
The IMF said such a sharp decline would be "much worse" than declines seen during the financial crisis a decade ago. For 2021, it forecasts a near 6 percent rebound helped along by government stimulus policies.
The revised outlook is titled "The Great Lockdown." "The COVID-19 pandemic is inflicting high and rising human costs worldwide, and the necessary protection measures are severely impacting economic activity," the revised outlook states.
The IMF projects a 5.9 percent decline for the U.S. economy in 2020 followed by a 4.7 percent rebound next year. In January, the organization predicted 2 percent growth this year for the United States. The most significant declines are projected for Italy (9.1 percent loss) and Spain (8 percent), where the disease has been particularly deadly.
The updated outlook assumes the pandemic fades in the second half of 2020 and containment efforts are gradually unwound.
"The risks for even more severe outcomes ... are substantial," the IMF said. "Effective policies are essential to forestall the possibility of worse outcomes, and the necessary measures to reduce contagion and protect lives are an important investment in long-term human and economic health."To limit this year's decline to 3 percent, it added, policymakers must implement "substantial targeted fiscal, monetary, and financial market measures" to support "affected households and businesses domestically."
Comment: The International Air Transport Association (IATA) has
warned that the coronavirus pandemic will cost global airlines $314 billion in revenue, as flights are down 80% compared to January. Investor Mark Mobius
believes the US has to open up soon, otherwise the collateral damage will be "incredible." Meanwhile, gold prices are
soaring. Futures are nearing $1,800/ounce, with experts saying that could reach $2,000/ounce in the near future. On the other hand, Mark Yusko of Morgan Creek Capital
believes that the actions of the Fed in just printing more and more money has "turned the dollar into toilet paper."
Comment: The International Air Transport Association (IATA) has warned that the coronavirus pandemic will cost global airlines $314 billion in revenue, as flights are down 80% compared to January. Investor Mark Mobius believes the US has to open up soon, otherwise the collateral damage will be "incredible." Meanwhile, gold prices are soaring. Futures are nearing $1,800/ounce, with experts saying that could reach $2,000/ounce in the near future. On the other hand, Mark Yusko of Morgan Creek Capital believes that the actions of the Fed in just printing more and more money has "turned the dollar into toilet paper."