India GDP to contract 4.5% on COVID-19: IMF
Key emerging market economies are taking a severe hit to GDP amid the COVID-19 pandemic, with India seeing the first contraction in decades, the IMF said.
- The updated World Economic Outlook shows India’s GDP will fall 4.5% this year, far worse than expected in April just after the pandemic first took hold outside of China. Mexico will see a double digit decline of 10.5% while Brazil just misses that mark with a drop of 9.1%.
- Argentina is projected to fall 9.9%, with the country already in the middle of a massive debt crunch on top of the health and economic crises.
- During the global financial crisis in 2009, these emerging markets, along with China, were booming, supporting the global economy even as advanced nations faced severe recessions. Meanwhile, South Africa’s GDP is seen dropping 8%, while oil-producer Nigeria falls 5.4%, it said.
- The pandemic has sparked an economic “crisis like no other,” sending world GDP plunging 4.9% this year and wiping out $12 trillion over two years, the IMF said.
- Worldwide business shutdowns destroyed hundreds of millions of jobs, and the prospects for recovery — along with the forecasts themselves — are steeped in “pervasive uncertainty” with the virus still rife, the IMF said.
- The U.S. economy is set to contract 8% in 2020, while China fares slightly better, posting growth of 1%, the report said.
- The IMF cautioned that trade and geopolitical tensions between the world’s largest economies could undercut a modest recovery in 2021.