The International Monetary Fund (IMF) today cut its projections for global growth given the impact of the novel coronavirus on China’s economy.
The revised outlook comes amid growing concerns over the virus’s impact on one of the world’s largest economies and the potential threat as it spreads to other territories.
Managing Director of the IMF, Kristalina Georgieva, announced the decreased estimate during the G20 Finance Ministers and Central Bank Governors Meeting in Riyadh, Saudi Arabia.
“To be adequately prepared, now is the time to recognise the potential risk for fragile states and countries with weak health care systems.”– IMF Managing Director Kristalina Georgieva
Georgieva said global growth for the year was projected at 3.3 per cent, an increase over last year’s 2.9 per cent. However, with the impact of the coronavirus on China, that has changed. “Since then, COVID-19—a global health emergency—has disrupted activity in China. And let me say here that my deepest sympathies go to the people in China and other affected countries.”
China’s annual growth projection fell 0.4 per cent to 5.6 for 2020 which moved the global estimate to 3.2 per cent, 0.1 per cent lower than previously expected.
The IMF chief said that while China continues to make efforts to lessen the impact of the virus on its economy and implement crisis measures,
“While the impact of the epidemic continues to unfold, the WHO’s assessment is that with strong and coordinated measures, the spread of the virus in China and globally can yet be contained and the human tragedy arrested. We are still learning about how this complex virus spreads and the uncertainties are too great to permit reliable forecasting. Many scenarios can play out, depending on how quickly the virus is contained and how fast the Chinese and other affected economies return to normal,” Georgieva said.
The evaluation was made with the assumption that China’s economy returns to “normal” during the coming quarter.
However, should the spread of the coronavirus be prolonged, the IMF said it is “looking at more dire scenarios.”
“Global cooperation is essential to the containment of the COVID-19 and its economic impact, particularly if the outbreak turns out to be more persistent and widespread. To be adequately prepared, now is the time to recognise the potential risk for fragile states and countries with weak health care systems,” Georgieva said.
The virus has infected almost 78,000 people, mostly in China, and killed more than 2,300 in less than three months.