Palestine Economy Portal

The International Monetary Fund said that the Covid-19 pandemic that swept the world, caused an "unprecedented" economic crisis, which would lead to a decline in global GDP by 4.9% and threatened to lose 12 trillion dollars over two years.

The IMF said in its update of the World Economic Outlook, that the prospects for post-pandemic recovery, such as the forecasts themselves, are mired in "uncertainty" given the unpredictable path of the virus.

The IMF added that the "Covid-19 epidemic" had a worse impact on economic activity in 2020 than expected, and that the recovery expectations are slower than previously expected.

"In light of the current expectations, the crisis will eliminate 12 trillion dollars in the next two years," said IMF chief economist Gita Gopinath, warning, "We are not yet out of danger."

She added that "the necessary joint support from fiscal and monetary policies must continue at the present time."

The International Monetary Fund report stressed that the economic downturn "specifically harms countries and low-income families alike, and threatens progress made in reducing the incidence of poverty," pointing to ILO data estimated at more than 300 million jobs lost in the second quarter. Of the year.

The report pointed to the chance that the recession will be less severe than expected despite the ambiguity, while warning that "the risks of a downturn are still great."

 The International Monetary Fund said sub-Saharan Africa's gross domestic product is expected to shrink 3.2 percent this year due to the repercussions of the Covid 19-pandemic, which exceeds an earlier estimate for a 1.6 percent contraction.

In an update to the World Economic Outlook, the IMF predicted that the gross domestic product of South Africa, the continent's most advanced economy, would shrink 8 percent in 2020, not 5.8 percent, as forecasted in April.

The IMF undertook a fundamental review of most of its forecasts issued in April in the first period of the epidemic, and its experts fear that the damage done by the Corona virus to employment and trade.

IMF also saw that the factor "prevented worse losses in the short term" is the massive government assistance to support workers and businesses, but the IMF urged countries to avoid a situation "in which aid is withdrawn prematurely, or used inappropriately", so that this could increase Economic damage.

The fund warned that "the decline in activity for a longer period can lead to more negative effects, including those resulting from wider closings of companies, with the reluctance of companies that have survived to employ job seekers."

With the transportation and industry sectors closed for weeks, the IMF expects global trade to collapse to just under 12 percent, and advanced economies will see a further decline.

The general closure imposed by countries to prevent the spread of the Corona virus has caused hundreds of millions of jobs to be shut down, and Europe's main economies are facing double digits.