Signage is displayed outside the IMF | Alex Wroblewski/Bloomberg
Signage displayed outside the IMF | Alex Wroblewski | Bloomberg
Text Size:

Washington: The International Monetary Fund said that the global economic outlook has worsened since its latest forecast three weeks ago and the world can expect more waves of financial market turbulence.

Developing nations’ external financing needs probably will be far above the $2.5 trillion that the IMF has previously projected, chief economist Gita Gopinath said in a webcast Thursday hosted by the Council on Foreign Relations. The fund will need all of its $1 trillion in current lending resources and isn’t being shy about telling countries how much support is needed, Gopinath said.

“We know this crisis isn’t going away anytime soon,” Gopinath said. “Things can get worse. The health crisis has not been solved.”

The IMF said in the World Economic Outlook report on April 14 that global gross domestic product will decline 3% this year. That baseline scenario assumed that the pandemic fades in the second half of this year and that containment measures can be gradually wound down, a scenario that looks less likely now, Gopinath said.

The IMF’s April outlook also sketched out three alternative scenarios in which the virus lasted longer than expected, returned in 2021 or both. A lengthier pandemic would wipe 3% off GDP this year compared to the baseline, while protraction plus a resumption next year would mean 8% less output than projected in 2021, the Fund said.

On the same webcast, Kenneth Rogoff, a professor at Harvard University professor and one of Gopinath’s predecessors at the IMF, said that some countries will face a solvency crisis and will need debt writedowns rather than just postponement of payments.-Bloomberg

Also read: Samurai Boost: Why Indian companies are leaning more on Japanese banks for funding


Subscribe to our channels on YouTube & Telegram

Why news media is in crisis & How you can fix it

You are reading this because you value good, intelligent and objective journalism. We thank you for your time and your trust.

You also know that the news media is facing an unprecedented crisis. It is likely that you are also hearing of the brutal layoffs and pay-cuts hitting the industry. There are many reasons why the media’s economics is broken. But a big one is that good people are not yet paying enough for good journalism.

We have a newsroom filled with talented young reporters. We also have the country’s most robust editing and fact-checking team, finest news photographers and video professionals. We are building India’s most ambitious and energetic news platform. And have just turned three.

At ThePrint, we invest in quality journalists. We pay them fairly. As you may have noticed, we do not flinch from spending whatever it takes to make sure our reporters reach where the story is.

This comes with a sizable cost. For us to continue bringing quality journalism, we need readers like you to pay for it.

If you think we deserve your support, do join us in this endeavour to strengthen fair, free, courageous and questioning journalism. Please click on the link below. Your support will define ThePrint’s future.

Support Our Journalism

Share Your Views


Please enter your comment!
Please enter your name here