Illustrative image of a meeting at the International Monetary Fund (IMF).
ANDREW CABALLERO-REYNOLDS / AFP
If countries are not "at the end of their sentences" because of the Covid-19 pandemic, the outlook for the world economy is less dire than estimated in June, announced the International Monetary Fund (IMF), this Thursday.
“Recent economic data suggests the outlook may be a little less dire than when the WEO (Growth Estimates Report) was updated on June 24,” said institution spokesperson Gerry. Rice.
"Some parts of the world economy are starting to turn the corner," he also commented, without however revealing precise figures since the International Monetary Fund will not publish its next updated forecasts until October 13.
"World trade has slowly started to recover"
On June 24, the Fund unveiled a particularly gloomy economic outlook with an estimate of more than 12 trillion dollars in cumulative losses for the global economy in 2020 and 2021. It also forecast a recession forecast of 4.9% this year, against 3% expected in April.
And for some countries, especially in Europe, the estimated contraction in gross domestic product (GDP) was staggering: -12.5% for France, -12.8% for Spain and Italy.
“The second quarter performance in China and a number of other advanced economies was better than expected,” Gerry Rice also said Thursday.
After the total paralysis of global activity, dubbed the “Grand Containment” by the IMF, countries began in the second quarter to relax the draconian measures taken to try to contain the pandemic.
Another positive element: the IMF notes "signs that world trade has started slowly to recover".
Precarious situation "
Outside of China, the outlook "remains very difficult, especially for many emerging markets and developing countries," he said.
For these countries, the situation remains "precarious" as they suffer from the fall in the prices of basic products, the decline in export demand, the decline in tourism and the decline in remittances from the United States. foreigner, he added.
The situation is particularly delicate for economies dependent on tourism and financing needs remain significant.
"We are very concerned that this crisis is reversing the progress in poverty reduction that has been made in recent years and is reversing the progress made towards achieving the Sustainable Development Goals," said also reacted Gerry Rice.
IMF calls on US for more fiscal measures
Asked about the situation of the United States, the traditional engine with China of world growth, Gerry Rice insisted on the "difficult situation facing American businesses and households".
He further stressed that the IMF's position was unchanged: the fund continues to encourage the government to quickly put in place a "new round of fiscal measures" to stimulate demand, support the most vulnerable and improve the situation. sanitary.
Negotiations on a new fiscal stimulus in the United States are deadlocked and it is difficult to envisage an agreement between Republicans and Democrats before the presidential election on November 3.
The IMF is also closely monitoring the indebtedness of countries, while there is a "significant increase in debt vulnerability" for many of them.
While the Fund considers it essential to maintain public spending to support the economy, it also urges governments to take measures to try to ensure that debt remains sustainable, for example with appropriate fiscal consolidation.
IMF Managing Director Kristalina Georgieva has been urging countries since the spring: “spend as much as you can, but keep the receipts”.
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