China's economy is expected to grow 1.9 percent this year, nearly twice as much as previously forecast, the International Monetary Fund said on Tuesday, tagging the country as the only major nation likely to expand in the face of the coronavirus.
The IMF forecast a 2020 global contraction of 4.4 percent in its latest World Economic Outlook, an improvement over a 5.2 percent contraction predicted in June, when business closures reached their peak.
However, Gopinath said that if China is excluded, global growth next year would be negative. The report includes revisions to June's forecasts and other historical data to reflect updated country weightings.
Gopinath said that except for China, where output is expected to exceed 2019 levels this year, output in both advanced economies and emerging market and developing economies is projected to remain below 2019 levels even next year.
"This is going to be slow".
The recession was less severe but still deep and "the ascent out of this calamity is likely to be long, uneven, and highly uncertain", International Monetary Fund chief economist Gita Gopinath said in the report released ahead of the annual meetings of the International Monetary Fund and World Bank.
"There is still much that needs to be done to ensure a sustained recovery", she said.
"The poor are getting poorer with close to 90 million people expected to fall into extreme deprivation this year", Gopinath said in a blog posting.
But he said debtor nations were too "deferential" to creditor countries and needed to more forcefully demand a smaller debt burden. Governments globally have implemented $6 trillion in direct tax and spending measures, according to the International Monetary Fund.
It lowered its unemployment rate forecast to 8.3 percent, down from 10.3 percent in an earlier forecast. That doesn't factor in potential additional fiscal stimulus, though, as President Donald Trump and Democrats continue to wrangle over measures. The advanced economy growth rate is projected to strengthen to 3.9 percent in 2021. Inflation, according to the document, this year will be 5.2%, and next year will increase to 5.8%. Advanced economies overall are seen declining 5.8 per cent in 2020, compared with 8.1 per cent previously.
But the USA rebound next year will be somewhat weaker at 3.1% growth - a forecast that assumes no additional federal government aid beyond around $3 trillion approved by Congress in March. Britain's economy will see a contraction of 9.8 percent, while Japan's economy could decline 5.3 percent. In 2021, world output will grow 5.2 per cent, it further added.
Gopinath said defeating the virus remains critical "But if we can end the health crisis sooner, and we can continue to provide income support to households, and we can prevent excessive bankruptcies and job destruction, then we can have a somewhat faster recovery".
-With assistance from Zoe Schneeweiss, Jeff Kearns and Sarina Yoo. Most of the shortfall would be in emerging-market firms, while the lenders considered systemically important by regulators would fare better than the rest, the fund said.