Global economic recovery is under threat due to the resurgence of coronavirus infections in Europe and the US, according to international rating agency Moody’s.
In a report released late Thursday, the agency said economic recovery has been picking up around the world but still remains fragile.
“A tentative economic recovery is underway but the path is beset by uncertainty,” said the report.
“Effective pandemic management, the development and distribution of a coronavirus vaccine, and the continuation of government policy support to households and businesses will determine the economic trajectory over the coming year.”
The speed of recovery will vary between countries since the impact has been more severe for some economies, Moody’s said.
It stressed that sustainable recovery is not possible in countries where new virus waves continue to disrupt economies.
The agency also revised its growth forecasts for G20 economies, saying they are expected to shrink by 3.8% this year and grow 4.9% in 2021 and 3.8% in 2022.
In August, Moody’s estimated that G20 economies will contract by 4.6% this year and grow 5.3% in 2021.
China’s economy is projected to fall by 2.2% in 2020 and rise by 7% next year, according to the latest projections.
Moody’s now expects India’s economy to shrink by 8.9% this year, lower than its earlier forecast of a 9.6% contraction.
The agency did not amend its projection for Turkey, saying its economy will narrow by 5% this year, before rebounding to 3.5% and 4% growth in 2021 and 2022, respectively.
Global economy facing deep recession over Covid crisis: IMF
The International Monetary Fund (IMF) has warned that the global economy was facing a deep recession with the ongoing impact of Covid-19.
“Uncertainty remains around the outlook, alongside long-term forces that shape and influence countries’ response to the virus and the recovery. People all over the world have seen profound changes in their lives: economic recession, unemployment, climate change, technology and the automation of jobs, the rise of digital currencies, lower returns on their savings, and rising inequality and debt,” stated IMF in its 2020 annual report.
“This year, as the world faced a crisis like no other, the IMF and its members swung into action. National governments took bold steps to save lives and put a floor under the world economy, with nearly $12 trillion in fiscal actions and about $7.5 trillion in monetary actions,” said Kristalina Georgieva, IMF Managing Director, in the report’s introductory message.
The package of measures endorsed as part of the quota review approved by the board of governors in February preserves our financial firepower, she noted.
“These measures include the doubling of the New Arrangements to Borrow and a new round of bilateral borrowing arrangements, which are expected to be effective in January 2021,” she added.
The 2020 IMF Annual Report focuses on Covid-19 response, the impact of economics on people’s lives, debt, climate change, and fintech.
Follow our English language YouTube videos @ REAL TURKEY: https://www.youtube.com/channel/UCKpFJB4GFiNkhmpVZQ_d9Rg
And content at Twitter: @AtillaEng
Facebook: Real Turkey Channel: https://www.facebook.com/realturkeychannel/